Hedge funds pile into gasoline amid pipeline, refinery woes
(Reuters) Money managers have amassed their largest bullish position in US gasoline in more than three months as pipeline and refinery outages send futures and pump prices of the motor fuel soaring, data showed on Friday.
Hedge funds and other speculators almost doubled their net long position in gasoline futures and options this week from a week ago as prices scaled two-week highs on the New York Mercantile Exchange (NYMEX).
Money managers held 20,310 gasoline contracts in net long for the week ended September 13, versus 11,148 for the week to September 6, data from the Commodity Futures Trading Commission showed. That was the largest net bullish wager for gasoline since late May.
In terms of long bets alone, there were 46,997 contracts. Shorts, representing bearish wagers, stood at 26,687.
An ongoing partial shutdown of the Colonial Pipeline, the vital artery bringing gasoline and other products to the US East Coast, have sent prices of the motor fuel soaring since late last week.
News that BP will cut production this weekend by at least 50% on the large crude distillation unit for repairs at its 413 Mbpd refinery in Whiting, Indiana, also boosted gasoline.
"There is a mad scramble by some commercial interests to be sure that their base for gasoline is covered, and the hedge fund community is sensing an opportunity trade from that, although it could be a temporary one," said John Kilduff, partner at New York energy hedge fund Again Capital.
Gasoline futures rose nearly 5% on NYMEX for the week ended September 13. For the full week to September 16, the market surged almost 8%, settling at $1.4616/gal, after setting a two-week high of $1.4788 on Friday.
The gasoline crack spread, a measure of profit for refiners turning crude into the motor fuel, meanwhile, jumped nearly 18% on Friday to its highest since June 6.
At the pump, retail prices of regular gasoline in states such as Georgia and Tennessee fetched $2.136/gal on Friday, up from $2.108/gal on Thursday.
"You're looking at a lot of terminals that are running pretty tight on gasoline supply and ... it's becoming an issue where motorists are starting to feel it with their wallets," said Patrick DeHaan, petroleum analyst at Gasbuddy.
In US crude futures, hedge funds and speculators raised their net longs by 17,829 contracts to 195,367 for the week ended September 16, reflecting the modest rise in crude oil prices during the period.
Reporting by Barani Krishnan; Additional reporting by Devika Krishna Kumar; Editing by Will Dunham
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