Gasoline Prices Drop on Crop Outlook

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Gasoline Prices Drop on Crop Outlook

Gasoline prices lost for the second day in New York on expectations that imports of the auto fuel will soar from an 11-month high and US refinery output will increase.

The US East Coast saw a surge in supplies of motor fuel from overseas, hitting 861 barrels per day in the week that ended May 9, the most since June 21 and the biggest point since 2007, government figures showed. Shipments from foreign markets may advance by an extra 50,000 barrels per day this week, Energy Analytics Group Ltd said.

“We saw a big jump in imports over the last week and we should see a larger-than-normal figure over the next week as well. “The prices in the U.S. have been high enough to continue attracting shipments from elsewhere,” Jim Ritterbusch of Galena, Illnois-based Ritterbusch & Associates told Bloomberg by phone.

The per gallon price of gasoline for June delivery decreased 0.91 cents or 0.3% to $2.9555 on the New York Mercantile Exchange as of 9:35 am.

Gasoline’s crack spread with respect to West Texas Intermediate crude decreased 22 cents to $21.68 per barrel. The premium to Brent, the European benchmark, went down 23 cents to $14.26%.

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US hit its highest production level of the auto fuel since December, at 9.61 million barrels per day, according to statistics from US Energy Information Administration.

Bets that RBOB gasoline futures prices would advance reached 60, 723 and options put together in the week that ended May 13 were nearly 19% above the average for the last five years for that particular date of the calendar, the US Commodity Futures Trading Commission said.

There is a very solid production of gasoline and the speculative length in the motor fuel is substantial, Ritterbusch added.

But according to FleetOwner, data from the EIA showed that pump prices for both diesel and gasoline declined slightly this week, on average.

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To contact the reporter of this story; Jonathan Millet at john@forexminute.com