Bloomberg News

Gasoline Futures Fluctuate After Rebounding on U.S. Jobs Report

March 14, 2013

Gasoline fluctuated in New York, rebounding from an earlier decline as U.S. initial jobless claims dropped.

Futures were little changed after a 1.4 percent drop. Volatility in gasoline remained higher than in crude amid swings in the cost of Renewable Identification Numbers for 2013 vintage, or RINS, that refiners must buy in lieu of blending ethanol into gasoline.

“The jobs report was positive,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “We’ve seen a huge amount of volatility in the gasoline contract as the market tries to figure out the impact of the increasing costs of renewable fuel credits.”

Gasoline for April delivery gained 0.36 cent to $3.1305 a gallon at 9:22 a.m. on the New York Mercantile Exchange after touching $3.0983. Trading volume was 12 percent above the 100- day average for the time of day. The contract is for reformulated gasoline to be blended with ethanol, or RBOB.

Gasoline volatility has increased even as crude oil has moved little. The 30-day average historical volatility for crude was 14.6 percent today compared with 33.2 percent for RBOB. That’s up from 19.9 percent on Feb. 25, when crude volatility was 15.5 percent.

Jobless Claims

First-time jobless claims fell by 10,000 to 332,000 in the week ended March 9, the fewest since mid January, according to data today from the Labor Department in Washington.

The price of 2013-vintage RINs gained 9 cents to 86.5 cents yesterday, according to data compiled by Bloomberg.

The April crack spread, or gasoline’s premium over West Texas Intermediate oil, gained 1 cent to $39.47 a barrel, the fourth consecutive drop. The spread versus Brent oil on the ICE Futures Europe exchange narrowed $1.19 to $22.26 a barrel.

Heating oil for April delivery gained 0.73 cent to $2.9315 a gallon on volume that was 21 percent below the 100-day average for the time of day.

Gasoline at the pump, averaged nationwide, fell 0.5 cent to $3.701 a gallon, AAA said today on its website. Prices are 11 cents below a year ago.

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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