Gasoline, Crude Give Up Gains as Traders Assess Supply Position

U.S. gasoline prices fell after five consecutive days of gains and crude traded below $47 a barrel as traders assess the risk to refineries and supply following flooding from Tropical Storm Harvey.

Motor fuel prices fell 0.7 percent in New York, while crude futures slipped from the lowest closing level in five weeks. Valero Energy Corp. and Citgo Petroleum Corp. were said to be preparing to restart their refineries in Corpus Christi after Harvey moved through over the weekend. The storm, which made landfall on Friday, is poised to regain strength before crashing ashore again near the Texas-Louisiana border on Wednesday.

“It is a question of the market reassessing the risk to refineries while also concluding we are past the peak season in terms of demand,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “We are seasonally heading towards a lower demand period which means that any signs of things beginning to normalize could have quite a negative impact on prices.”

Gasoline for September delivery dropped as much as 1.23 cents to $1.70 a gallon on the New York Mercantile Exchange, and traded at $1.7005 at 11:32 a.m. London time. Prices added 2.7 percent on Monday after advancing to the highest price since July 2015.

West Texas Intermediate crude for October delivery fell 3 cents to $46.54 a barrel after dropping 2.7 percent Monday to $46.57. Brent crude slid 41 cents to $51.48 on the London-based ICE Futures Europe exchange. The global benchmark traded at a premium of $4.93 to WTI.
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