Bloomberg News

Heating Oil Futures Advance as Brent, Gasoil Gain in Europe

February 01, 2013

Heating oil rose for a fifth consecutive day as stronger Brent crude increased output costs for refiners using oil priced off the London benchmark and as gasoil in Europe advanced.

Futures advanced as Brent oil on ICE Futures Europe exchange broke above $116 a barrel and its premium to West Texas Intermediate crude widened $1.15 to $19.21 a barrel on the Nymex. Gasoil climbed above $1,000 a metric ton in Europe.

“We’re back to refined products following Brent and ignoring WTI,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York.

Heating oil for March delivery rose 2.86 cents, or 0.9 percent, to $3.1473 a gallon at 10:09 a.m. on the New York Mercantile Exchange. Volume was 18 percent below the 100-day average for the time of day.

Prices are heading for a 3 percent gain this week, after climbing 2.8 percent in January, the largest increase since August.

The March gasoil contract added $9.50 to $992.25 a metric ton on the ICE Futures Europe exchange in London, while the February contract touched $1004.50. Heating oil’s discount to gasoil, based on balance-month Nymex and ICE calendar swaps, increased 0.29 cent to 3.64 cents a gallon, Bloomberg fair-value data show.

Gasoline fluctuated on speculation that near-term supply in New York Harbor is sufficient, even as refinery maintenance and the planned closing of a plant may curtail production.

Trainer Refinery

Delta Air Lines Inc.’s Monroe Energy LLC subsidiary on expects to restart the fluid catalytic cracker next week at its Trainer refinery in Pennsylvania, Trebor Banstetter, a spokesman for Delta in Atlanta, said in an e-mail.

“Gasoline is under a little bit of pressure with the expectation of the Trainer cat cracker coming back next week, which increases supply in the Northeast,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Gasoline for March delivery gained 0.5 cent to $3.0367 a gallon on volume that was 20 percent above the 100-day average for the time of day. The discount of March to April futures expanded 0.8 cent to 15.72 cents a gallon.

Prices are heading for a 5.6 percent increase this week. Futures climbed 7.6 percent in January, the second-best performer on the Standard & Poor’s GSCI commodity index, after cotton.

The retail price for regular gasoline, averaged nationwide, rose 3.9 cents to $3.462 a gallon, the highest level since Nov. 7, AAA said today on its website. That’s the largest one-day increase since Aug. 28.

To contact the reporter on this story: Barbara Powell in Dallas at bpowell4@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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