U.S. gasoline futures jumped 3.8% Wednesday while crude-oil prices declined, after an explosion at a major refinery in Canada focused attention on low U.S. fuel supplies.
Gasoline futures surged as high as $3.0874 a gallon on the New York Mercantile Exchange midday Wednesday after a blast at Irving Oil's 300,000-barrel-a-day Saint John Refinery in New Brunswick, Canada.
The refiner said damage was minimal and operations would resume later Wednesday, but the accident highlighted the increasingly tenuous gasoline-supply situation in parts of the U.S. Fuel stockpiles in the Northeast U.S. are at their lowest level since November 1990, according to the latest Energy Department figures.
"It's a reminder that gas supplies are low for this time of year, and a reminder that you have very thin margins for error," said Phil Flynn, an energy analyst at Price Futures Group. "When that story came across, it got everyone nervous, and you buy first and ask questions later."
Stockpiles are at a nearly four-year low nationally, having dropped 14.2 million barrels in the past nine weeks, though demand also has fallen.
October reformulated gasoline blendstock, or RBOB, settled 11.4 cents higher at $3.0811 a gallon, while the more actively traded November contract rose 5.14 cents to $2.8738 a gallon.
Heating oil settled near flat, down 0.18 cent at $3.1068 a gallon.
The surge in gasoline prices wasn't enough to lift crude-oil futures, which were snagged by concerns about Europe's debt crisis and data that showed weak U.S. fuel demand.
Oil fell after data released by the U.S. Energy Information Administration showed four-week demand for fuel products fell to the lowest level since April 6.
Bob Yawger, director of energy futures at Mizuho said he was surprised that oil prices continued to fall despite the climb in gasoline. But with U.S. stockpiles of crude oil still high, traders aren't as nervous about supplies, particularly as the broader economy shows signs of weakness.
Light, sweet crude for November delivery settled $1.39, or 1.5%, lower at $89.98 a barrel on Nymex, the first close below $90 since early August.
Brent crude on the ICE futures exchange fell 41 cents to $110.04 a barrel.
Weaker data on U.S. fuel usage arrived along with new worries about Europe. Spain roiled markets following calls for early elections in Catalonia and a decision by the Spanish prime minister to restrict early-retirement programs.
Meanwhile, unions in Greece began a general strike over austerity measures, and street protests there turned violent.
After surging toward $100 a barrel earlier this month on optimism about new stimulus measures from the U.S. Federal Reserve, oil prices have slumped over the past two weeks as investors grow uneasy about slowing global growth.
Copyright (c) 2012 Dow Jones & Company, Inc.
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