Gasoline futures rose 3.5% Friday amid reports of tight supplies in the Northeast and in anticipation that the region's recovery from Hurricane Sandy would boost demand for the fuel.
Gasoline futures for December delivery settled Friday at $2.699 a gallon, up 9.19 cents, or 3.5%. Crude futures for December delivery on the New York Mercantile Exchange settled at $86.07 a barrel, up 98 cents, or 1.2%. Brent futures settled at $2.15 per barrel to settle at $109.40.
The rise in gasoline came one day after New York Mayor Michael Bloomberg instituted a gasoline-rationing plan for New York City, whereby motorists would alternate fueling days based on their license-plate numbers.
The policy underscores how the fuel market remains tight in the metropolitan area due to outages at petroleum terminals and other critical infrastructure. The mayor has said the problem could persist for another couple of weeks.
Phil Flynn, an analyst at the Price Futures Group, said gasoline futures also were responding to the revival of driving and other economic activity in the Northeast following the slowdown after superstorm Sandy.
"We're pricing back in the gasoline demand coming back to normal," Mr. Flynn said.
Oil futures spent much of the morning veering between positive and negative territory, as the market remained edgy over continued problems in the euro zone and concerns that U.S. policy makers wouldn't address the so-called "fiscal cliff."
But oil picked up steam as the day progressed, reaching as high as $86.77 a barrel at midday.
A chief catalyst for the move in oil--and also equities--was a fresh measure of consumer confidence, analysts said. The preliminary reading of the University of Michigan/Thomson Reuters index for November rose to 84.9, the highest level since July 2007 and well above the 81.5 expected.
Fred Rigolini, vice president at oil-options brokerage Paramount Options, said the market also was buoyed by remarks from U.S. President Barack Obama regarding fiscal-cliff talks. Mr. Obama Friday invited congressional leaders to the White House to discuss the fiscal issues, but insisted that any final deal would have to include a tax on the wealthiest Americans.
Mr. Rigolini predicted oil would be range-bound in about $84-$90 until there is a resolution to the fiscal situation.
"If they do anything, it's going to have a short-term boost for us as well as equities," Mr. Rigolini said of the talks.
Front-month heating oil futures settled at 3.006 per gallon, up 5.04 cents.
Copyright (c) 2012 Dow Jones & Company, Inc.
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