‘Cold and Icy’
The winter weather helped drag pump prices lower across the U.S., according to Michael Green, a spokesman for AAA.
“The main reason gasoline prices are dropping is the significant declines we’re seeing in demand,” Green said by phone from Washington. “People don’t like driving when it’s dark, cold and icy outside so they’re not buying gasoline. We expect prices will remain flat as demand is weak.”
Gasoline consumption, which has posted a monthly decline every January since 1996, has fallen 9.8%, or 872,000 barrels a day, since the end of 2013, according to EIA data.
Futures slumped 2.23 cents, or 0.8%, to $2.6563 on Jan. 8, the first day of the report period, after the EIA said that East Coast stockpiles climbed 2.18 million barrels to 59.4 million in the seven days ended Jan. 3, the highest level since Aug. 9. Imports climbed by 127,000 barrels to 367,000, the first gain in six weeks.
Gasoline fell 1.37 cents to $2.6426 the following day as the Labor Department reported applications for unemployment benefits dropped 15,000 to 330,000 in the period ended Jan. 4, the fewest since November.
The fuel rebounded 2.65 cents to $2.6691 Jan. 10 as the Labor Department said December payrolls rose at the slowest pace since January 2011, boosting speculation the U.S. Federal Reserve will maintain its bond-buying pace to stimulate growth. The Fed, which will meet Jan. 28-29, announced in December a reduction of $10 billion in its monthly bond-buying program to $75 billion, citing a recovery in the U.S. labor market.
Gasoline retreated 3.5 cents on Jan. 13 and 1.17 cents on Jan. 14 to finish the report week at $2.6224 a gallon. Futures fell on speculation inventories would gain 2.5 million barrels in an EIA report released Jan. 15. The report showed stockpiles surged 6.18 million.
Net-long positions in Nymex gasoline tumbled 10,397 futures and options combined to 37,541, a second consecutive drop. Long positions fell by 3,224, while shorts increased by 7,173, the biggest percentage gain in 20 months.