Gasoline Is Little Changed on Speculation Inventories May Rise

Gasoline futures were little changed amid estimates a weekly Energy Department report will show a rise in U.S. inventories as refinery production increased.

Supplies probably grew 500,000 barrels last week, according the median of nine estimates in a Bloomberg News survey of analysts. Refineries operated at 90.3 percent of nationwide capacity, up 0.9 percentage point from the previous week, the survey predicted. The Energy Department will release its report on Thursday, July 5.

``I'm really not expecting a lot from the market unless we get something dramatic on Thursday,'' said William Adams, chief energy and capital market strategist for LaSalle Futures Group in Chicago. ``We're really just consolidating'' before the July Fourth holiday. ``You really don't want to get caught holding before a report after a holiday.''

Gasoline for August delivery rose 0.59 cent, or 0.3 percent, to settle at $2.2487 a gallon at 2:53 p.m. on the New York Mercantile Exchange. The contract covers reformulated gasoline, known as RBOB, which is made to be blended with ethanol before delivery to filling stations.

``The market is getting pushed around here,'' said Dean Hazelcorn, a senior trader at Dallas-based Coquest Inc. ``It's really kind of quiet'' with low trading volume as some investors take time off for the July Fourth holiday.

Crack Spread

The margin, or crack spread, earned by refiners for turning two barrels of crude oil into a barrel of gasoline and a barrel of heating oil rose 12.1 cents, or 0.6 percent, to $19.43 a barrel, based on New York futures prices.

``Fundamentally the market is showing an uptrend,'' Adams said. The size of the inventory increase ``will show us how much farther we can go.''

The national average pump price for regular gasoline fell 0.4 cent to $2.957 a gallon, AAA said today on its Web site.

The Energy Department is scheduled to release its report covering supplies in the week ended June 29 on July 5 at 10:30 a.m. in Washington, a day later than normal because of the July Fourth holiday.

Heating oil for August delivery rose 1.94 cents, or 1 percent, to $2.0618 a gallon in New York.

source:bloomberg.com