Gasoline Prices may have Peaked in U.S.

Gas May Have Peaked on Sliding Demand, Slowing Job Growth
 

Gasoline May Have Peaked on Sliding Demand, Slowing Job Growth

By Barbara Powell | Bloomberg – 2 hours 30 minutes ago

U.S. gasoline pump prices may have peaked for the year as demand slides, job growth slows and crude prices moderate.
Regular gasoline, averaged nationwide, has fallen five straight days to $3.915 a gallon, the longest streak since December, after surging 20 percent to $3.936 on April 4, according to data from AAA, the nation's biggest motoring club. Americans have purchased 5.3 percent less gasoline so far this year than in 2011, data from credit-card receipts analyzed by MasterCard Inc. showed yesterday.
Deliveries (DOEDMGAS) to wholesalers last week were 5.4 percent below a year earlier, the Energy Department reported today. The department forecast consumption to decline to 8.65 million barrels a day this year, the lowest level in 11 years. The U.S. added the fewest jobs in five months in March, the Labor Department said April 6, limiting prospects for higher demand.
"Gasoline was the best-performing asset in the first quarter, but the sentiment is turning," said Amrita Sen, a London-based analyst at Barclays Capital. "For the time being, our view is that it has probably peaked."
Prices reached the highest level of 2011 at $3.985 on May 4, weeks before the U.S. Memorial Day holiday kicked off the traditional start of the summer driving season. The record retail price was $4.114 on July 15, 2008.
Gasoline in the U.S. will peak in May at $4.01 a gallon, the Energy Department said yesterday in its monthly Short-Term Energy Outlook.
Best Performer This year gasoline futures have been the best performer in the Standard & Poor's GSCI index of 24 commodities amid a surge in international crude prices as tensions built over Iran's nuclear program, an improving U.S. job market and refinery shutdowns.
The futures have retreated 3.8 percent since reaching $3.4166 a gallon on the New York Mercantile Exchange March 26, a 10-month high, after Federal Reserve Chairman Ben S. Bernanke said accommodative monetary policy is needed for the unemployment rate to continue to decline. Gasoline had surged 27 percent in 2012, compared with a 10 percent gain for heating oil and an 8.3 percent increase for crude oil.
The 2012 gains have been pared to 21 percent by yesterday and gasoline was close to being overtaken by soybeans as the year's top commodities performer.
The government yesterday reduced its demand forecast. Consumption will average 8.65 million barrels a day in 2012, down from 8.74 million in 2011. That's below last month's projection of 8.67 million.
Iran Talks Iran and the five permanent members of the United Nations Security Council plus Germany are scheduled to hold talks on the Persian Gulf nation's nuclear program April 14 after a 15-month hiatus.
"Barring a blowup during the Iran talks over the weekend, the craziness is over," said Dominick Chirichella, senior partner at the Energy Management Institute in New York.
The front-month Brent crude contract on London's ICE Futures Europe exchange, after reaching $128.40 on March 1, the highest since July 2008, settled yesterday at $119.88. Brent is the benchmark for oil used in European refineries that export gasoline to the East Coast.
To contact the reporters on this story: Barbara J Powell in Dallas at bpowell4@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net