Gasoline sank to a seven-week low as Brent crude weakened and amid concern economic growth in the U.S. and China may slow. Crack spreads narrowed.
Futures slipped as Brent crude dropped below $100 and its premium to the U.S. benchmark oil narrowed, making processing oil priced off Brent less expensive. Goldman Sachs Group cut China’s growth forecast. U.S. Federal Reserve Chairman Ben S. Bernanke indicated last week the central bank may begin tapering its bond buying this year and end it in 2014.
“Brent has finally given it up,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “Then there’s the situation in China and Goldman Sachs lowering their growth estimates. What could turn the market around is if the Feds ease concerns about tapering.”
July-delivery gasoline fell 1.53 cents, or 0.6 percent, to $2.7464 a gallon at 9:51 a.m. on the New York Mercantile Exchange, after sliding 4.7 percent last week. Volume was 21 percent below the 100-day average at 3:17 p.m.
Gasoline’s crack spread versus August West Texas Intermediate narrowed 97 cents to 20.70 a barrel. The fuel’s premium over Brent fell 42 cents to $14.03.
Brent oil for August delivery fell 71 cents to $100.20 and touched $99.82. Brent’s premium to West Texas Intermediate narrowed 38 cents to $6.84.
“The oil markets continue under pressure, Brent especially, due to the weakness in Chinese manufacturing,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Gasoline at the pump, averaged nationwide, slipped 0.6 cent to $3.567 a gallon, Heathrow, Florida-based AAA said today on its website. Prices have retreated since June 12 and are the lowest since May 9.
Ultra-low-sulfur diesel for July delivery gained 0.37 cent to $2.8478 a gallon on trading volume that was 15 percent above the 100-day average. Prices fell 4 percent last week.
ULSD’s crack spread versus WTI was unchanged at $25.73 a barrel. The premium over Brent was 55 cents higher at $19.06.
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