There is good news or bad news these days depending on which side of the fence you are dealing in the petroleum market. The April WTI crude oil price surged back over $44 a barrel today. This was mainly due to The United American Emirates cutting back on some more oil exports to Asia in anticipation of the March OPEC meeting.
To cut to the chase, this and last week’s downward trend in the petroleum markets has come to an end. Wholesale gasoline rack prices are firming up once again this week due to a myriad of oil refinery problems in the U.S.
There is still is disconnect between the prices of gasoline and crude oil. With a cacophony coming out from oil analysts it's not no wonder motorists are confused about the reasons for the ups and downs for what they pay at the pump. That price is now being determined by the oil refiners who will only pay for crude oil by what the market will bear for gasoline. Therefore gasoline pump prices are now actually leading the price for crude oil. This is may be a classical case of the tail wagging the dog.
Building on this week’s Wednesday increase, crude and refined products futures on both sides of the Atlantic are seeing gains mainly bolstered by signs that gasoline demand in the U.S. may finally going back up.
The Department of Energy inventory statistics report showed an unexpected gasoline stock decline. According to Wednesday's DOE report, motor gasoline demand over the last four weeks has averaged 9 million barrels per day, up 1.7% from the same period last year.
This could be due to the start of another springtime gasoline-led price rally when the oil refineries switch from producing winter to summer gasoline. The process takes an extra refining process and results in a reduction of ten per cent supply of finished gasoline. The typical oil refiner will take a barrel of crude oil and produce about 21 gallons in the winter with only 19 gallons in the summer. There are 42 gallons in a barrel of crude oil.
Bob van der Valk is the Director of U.S. Branded License Program and Fuel-pricing Analyst with 4Refuel Inc. in Lynnwood, Washington and can be contacted at (971) 678-2975 or e-mail to: tridemoil@aol.com
My viewpoints can be viewed on my personal web page at: http://www.4vqp.com/ourconsultants/thegasguy.html
Any views expressed in this newsletter are those of the writer, except where the writer specifically states them to be the views of the 4Refuel group of companies.
To cut to the chase, this and last week’s downward trend in the petroleum markets has come to an end. Wholesale gasoline rack prices are firming up once again this week due to a myriad of oil refinery problems in the U.S.
There is still is disconnect between the prices of gasoline and crude oil. With a cacophony coming out from oil analysts it's not no wonder motorists are confused about the reasons for the ups and downs for what they pay at the pump. That price is now being determined by the oil refiners who will only pay for crude oil by what the market will bear for gasoline. Therefore gasoline pump prices are now actually leading the price for crude oil. This is may be a classical case of the tail wagging the dog.
Building on this week’s Wednesday increase, crude and refined products futures on both sides of the Atlantic are seeing gains mainly bolstered by signs that gasoline demand in the U.S. may finally going back up.
The Department of Energy inventory statistics report showed an unexpected gasoline stock decline. According to Wednesday's DOE report, motor gasoline demand over the last four weeks has averaged 9 million barrels per day, up 1.7% from the same period last year.
This could be due to the start of another springtime gasoline-led price rally when the oil refineries switch from producing winter to summer gasoline. The process takes an extra refining process and results in a reduction of ten per cent supply of finished gasoline. The typical oil refiner will take a barrel of crude oil and produce about 21 gallons in the winter with only 19 gallons in the summer. There are 42 gallons in a barrel of crude oil.
Bob van der Valk is the Director of U.S. Branded License Program and Fuel-pricing Analyst with 4Refuel Inc. in Lynnwood, Washington and can be contacted at (971) 678-2975 or e-mail to: tridemoil@aol.com
My viewpoints can be viewed on my personal web page at: http://www.4vqp.com/ourconsultants/thegasguy.html
Any views expressed in this newsletter are those of the writer, except where the writer specifically states them to be the views of the 4Refuel group of companies.
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