MW:Oil futures slip as retail gasoline prices jump
Retail gasoline prices surge after Chevron confirms refinery fire
By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — Benchmark U.S. oil futures gave back a portion of their gains in electronic trade during Asian hours Tuesday as the U.S. dollar edged higher.
Crude for September delivery CLU2 +0.08% fell 29 cents or 0.3% to $91.91 a barrel, reversing direction after a 0.9% gain at the Monday session on the New York Mercantile Exchange.
Crude’s loss tracked the U.S. dollar’s gain, with the ICE dollar index DXY -0.14% rising to 82.304 from 82.175 late Monday in North America, though the index remained below its 82.390 level at the end of last week.
A rising dollar makes dollar-denominated crude more expensive to holders of other currencies, which can put downward pressure on the futures.
Still, the September contract remained in the $91-$92 range after surging sharply last week on the back of stronger-than-expected U.S. jobs data.
In a note late Monday, Citi Futures analysts said that volume was relatively weak, raising some uncertainty over the direction of crude.
“On a weekly average basis, volumes have been declining since the first week of July, even as prices have recovered, tending to suggest that the bears have only stepped aside to gauge how far the market will bounce,” they wrote, advising investors to stay out of the market “until we can identify a new low-risk trade.”
Retail gasoline surging
Elsewhere in the energy complex, September gasoline RBU2 +0.10% slipped 0.1% to $2.92 a gallon.
Retail gasoline prices in the U.S. were a very different story, however, with the Energy Information Administration reporting a 13.7-cent surge to an average price of $3.645 a gallon.
The leap in retail pump prices — the largest one-week jump since May 2009 — came on the heels of several refinery and pipeline problems, particularly in the Midwest. Read more on U.S. retail gasoline price rise.
Adding to such issues, Chevron Corp. CVX +0.17% confirmed late Monday that its refinery in Richmond, Calif., was on fire. No fatalities were reported, but authorities urged Richmond residents to stay indoors to avoid toxic chemicals released by the fire.
The Richmond refinery reportedly represents about 10% of the refining capacity on the U.S. West Coast. Read more on Chevron fire.
Among other energy contracts, September natural gas NGU12 -0.03% lost a penny, or 0.3%, to $2.90 per million British thermal units, while September heating oil HOU2 +0.08% gave up 0.2% to $2.94 a gallon.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
