Summer driving season running out of gas?
From the look of the markets and the huge amount of distrust in some Euro nations ability to pay down their debt, we just might dodge the season of high gas prices yet!
Some analysts out there (...that follow my words...lol) are also reflecting on the fact that we're already at the start of the summer driving season and we haven't seen that significant run-up in prices leading up to the start of the US Memorial Day holiday. As a matter of fact, spot pricing for all petroleum products I measure went below two bucks a US gallon for the first time in months just today.
With the exception of last week when the numbers started dropping, heating, stove oils, diesel and gasoline spot prices have mostly stayed steady on the markets since the start of February.
That's a good sign to the consumer but it's a bad one for Big Oil.
Forced to increase capacity again as the end of maintenance programs brings refineries back online, capacity has again increased from the historic low of close on 77 per cent to reach almost 88 per cent this past week. Margins are being squeezed and that means a drop in profits on the refining end.
That also means more gasoline back in the markets ,and with an excess of crude oil the possibility that there's an overabundance of supply out there. The imports of gasoline also continue to add up. Gasoline supplies are about seven per cent over what they were this same time last year with demand a paltry two per cent over that of last year, in spite of prices below that of 2008 for the same time frame.
With economic and debt troubles overseas, there simply is no incentive or reason why prices will increase anytime soon, irregardless of what some of the hurricane watchers are calling for, something in the area of nine major storms that could disrupt imports.
In other words, I believe that we have hit the peak of summer prices already.
Numbers so far...
Here's what I have so far for this regulation period, keeping in mind that we lost a good three cents against the US dollar over that last six or seven days:
- Heating and stove oils are down by 89/100ths of a cent.
- Diesel is down by 1.5 cents a litre, and...
- Gasoline shows down by 6/10ths so far.
I'll be back around 9 p.m tomorrow night, a little earlier than normal.
I'll see you then!