"Just as the market was trying to digest exactly what this love-fest meant for the energy complex, the Department of Energy blindsided us with a wildly bullish 5-million-barrel drop in gasoline supply," said Phil Flynn, a senior analyst at Alaron Trading.
"For gas consumers, the DOE report can best be described as disturbing at the very least," he said in an e-mailed note to clients. "Gasoline supplies are tightening at a disturbing rate and that could mean only bad news for the consumer as we get ready to start a new summer-driving season."
On Wednesday, Energy Department data showed a 5 million barrel decline in supplies of motor gasoline for the week ended March 30 -- much bigger than the market was expecting. Crude supplies rose a bigger-than-expected 4.3 million barrels while distillates were unchanged in the latest week.
Here's a chart of gasoline inventories from This Week in Petroleum:
This has lead to continued price increases:
Gasoline prices saw another significant increase for the week of April 2, 2007, jumping 9.7 cents to 270.7 cents per gallon. This is the ninth consecutive week of increases; prices are now 11.9 cents per gallon higher than at this time last year. All regions reported higher prices.
This is not a good sign at all.
4 comments:
If gas prices continue to shoot up, dream-on-ski about a rate cut anytime soon
All of these people who are arguing for a rate cut...I just don't get it. The Fed has been very clear and remarkable unified in their public statements about inflation being too high.
I was under the impression it's typical for a draw down on distillate stocks at this time as we're switching formulations. Do you have a graph showing gasoline inventories from jan-06 to may-06?
The chart from this week in petroleum only goes back one year.
However, notice three things.
1.) The steepness of the drop, and
2.) The fact prices are already higher this year than last, and
3.) Prices have increased for 9 weeks.
Add those three things together and you have a recipe for not lowering interest rates, inflationary pressures and decreased consumer spending.
Post a Comment