Gasoline Futures Rise to 4-Month High

Gasoline futures rose 2.9% to a four-month high in New York trading Tuesday on speculation that summer travel and refinery shutdowns are sapping inventories that already are below normal.

The nation’s gasoline reserves declined about 1.18 million barrels last week, based on a Bloomberg survey of analysts ahead of a weekly government report. ConocoPhillips and at least two other companies curtailed production at U.S. refineries in the last month because of unscheduled repairs.

“There’s a general sort of bullishness starting to grip the market related to the one-after- another supply problems,” said Chris Mennis, owner of New Wave Energy, a trader of oil swaps and oil products in Aptos, Calif. “A lot of little problems makes a big problem.”

Gasoline for September delivery rose 2.72 cents to 95.39 cents a gallon on the New York Mercantile Exchange, marking the highest closing price for a front-month contract since March 28. Gasoline futures are up 24% from a year ago.

The U.S. Energy Department releases its weekly petroleum inventory report today.

Gasoline reserves fell a combined 4.9 million barrels for the two weeks ended July 25, reaching a four-month low of 204.5 million barrels, Energy Department data show. The July 25 supply total was the lowest since the week ended April 18.

With supplies down and demand rising, refinery shutdowns or other supply disruptions can push prices higher. The closings may hamper refiners’ ability to maintain adequate supplies in the Midwest and other regions.

ConocoPhillips, the largest U.S. oil refiner, shut most of its Ponca City, Okla., refinery July 21 after an explosion and fire. The company plans to process crude oil at about 62% of capacity during the next two months as it repairs the damage.

Royal Dutch/Shell Group and Valero Energy Corp., one of the major suppliers of gasoline to the California market, also shut parts of refineries last month for unplanned work.

Gasoline prices also have risen at the pump as refiners passed along higher costs for crude oil during the last three months. The average U.S. retail price for self-serve regular gasoline rose 2 cents in the week ended Monday to $1.536 a gallon, the highest in more than three months, the Energy Department said. The price is 10% higher than a year ago.