Newspaper article THE JOURNAL RECORD

Gasoline Futures Increase amid Expected Decline in Inventories

Newspaper article THE JOURNAL RECORD

Gasoline Futures Increase amid Expected Decline in Inventories

Article excerpt

NEW YORK -- Gasoline futures rose amid expectations that a seasonal rise in demand will be strong enough to erode inventories.

A report after the close of trading by the American Petroleum Institute is expected to show a decline in gasoline inventories last week, ahead of the Memorial Day holiday weekend, according to analysts surveyed by Bloomberg News. Gasoline consumption typically peaks during the summer on increased demand from motorists.

Signs of operating problems at some refineries along the U.S. Gulf Coast also lifted prices, traders said, since production hitches could force refiners to buy gasoline on the market to meet their commitments. "People are more optimistic about gasoline in this report than crude and (heating oil), which are expected to show builds in inventory," said John Saucer, an analyst at Smith Barney Inc. in Houston. Gasoline for June delivery rose 0.42 cent to 65.80 cents a gallon at the close of trading on the New York Mercantile Exchange. July crude oil stayed steady at $20.79 a barrel on the Nymex at the close, while June heating oil rose 0.12 cent to 55.39 cents a gallon. Analysts expect U.S. inventories of gasoline probably fell last week ahead of the Memorial Day holiday that traditionally marks the beginning of the summer driving season. Six out of eight analysts surveyed by Bloomberg News said they expect gasoline inventories fell in the week ended May 23, by an average of 1 million barrels. The remaining two analysts forecast increases averaging about 2 million barrels. "The focus is on gasoline, and a decline in inventories last week should reflect the beginning of summer travel," said Graham Frey, a trader at GSC Energy Corp. in Atlanta. "While refinery runs are probably close to their all-time highs, there were a few snags last week, but we think that runs will probably go back up to 98 percent. …

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