Gasoline fell as Hess Corp. returned its New Jersey refinery to full production and on optimism that U.S. Secretary of State Hillary Clinton can broker a truce between Israel and members of the Islamist Hamas movement.
Futures slid as Hess’s Port Reading refinery ran at full rates for the first time since Hurricane Sandy’s Oct. 29 landfall in New Jersey. Israel postponed a decision on launching a ground invasion into the Gaza Strip, giving international negotiators a chance to craft a cease-fire, a government official said as Clinton flew to the region.
“The expectation is a diplomatic breakthrough will be achieved,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Gasoline for December delivery fell 1.18 cents, or 0.4 percent, to $2.7427 a gallon at 10:09 a.m. on the New York Mercantile Exchange.
Futures settled yesterday at the highest level this month amid concern that Israel’s attacks on the Gaza Strip might spread unrest in the Middle East, disrupting oil supplies.
The Energy Department will probably report tomorrow that gasoline supplies rose 1 million barrels last week, according to the median estimate of 11 analysts in a survey by Bloomberg.
East Coast supplies fell to a four-year low in the week ended Nov. 9 as Sandy disrupted production and distribution. Imports recovered after hitting the lowest level since December 1999 in the prior week. MasterCard Inc.’s SpendingPulse report showed demand at the pump in the seven days ended Nov. 9 slid to the lowest since March.
“Hess Port Reading coming back is bringing us down a bit and gasoline supplies are going to build a little bit as we see the imports go back up and on weak demand,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.
December-delivery heating oil gained 0.19 cent to $3.077 a gallon on the exchange, after settling yesterday at the highest level since Oct. 30. The department will probably report that supplies of distillates, including heating oil and diesel, declined 1 million barrels, according to the survey.
The average nationwide cost for regular gasoline slipped 0.4 cent to $3.412 a gallon, AAA said today on its website. That’s the lowest price since July 16. The pump price reached a 2012 high of $3.936 on April 4.
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