Gasoline falls to 1-week low as some U.S. refiners plan return

Gasoline prices in the U.S. declined to the lowest in more than a week as some U.S. Gulf Coast refineries said they plan to resume operations following shutdowns forced by flooding from Harvey.

Futures for October delivery lost as much as 5.2 per cent in New York after their biggest monthly gain since March last year.

While about one-fifth of U.S. refining capacity was halted, according to data compiled by Bloomberg, some plants including those operated by Citgo Petroleum Corp. and Marathon Petroleum Corp. are beginning to return.

The Energy Department also approved the release of 5.3 million barrels of crude from the Strategic Petroleum Reserve.

Front-month gasoline prices advanced more than 25 per cent in August as Harvey slashed processing capacity across Texas, forcing shutdowns of key refineries from Corpus Christi and Houston to Port Arthur, including the largest U.S. fuel-making plant. Oil in New York declined almost six per cent last month.

“The disruptions from Hurricane Harvey in the U.S. Gulf Coast are gradually clearing,” wrote analysts at JBC Energy GmbH.

“In the broader scheme of things, it appears that so far the energy industry was spared major damages to assets and infrastructure.”

October gasoline futures lost as much as US9 cents to US$1.6579 a gallon on the New York Mercantile Exchange and were trading at US$1.6893 as of 12:28 p.m. New York time.

West Texas Intermediate for October delivery was little changed at US$47.35 a barrel, while Brent for November settlement slipped US42 cents, or 0.8 per cent, to US$52.33 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $4.40 to November WTI.

Meanwhile, Russia is likely to back a further extension of the OPEC agreement cutting oil output, judging that it has helped to stabilize the market, the country ’s deputy prime minister said.

Money managers have cut their bullish Nymex WTI crude bets by the most since 2007, while bets on rising Nymex gasoline prices increased to the most bullish in more than six months in the week ended Aug. 29, U.S. Commodity Futures Trading Commission data show.