I haven’t let you know whats going on (well, we haven’t had a risk of a price hike, and I believe we still don’t)
Just thought with today’s DOE report, I’d let you know how things are looking.
The DOE report was much better than traders or I thought it would be (Labor Day didn’t kill inventories), so here is the good news:
** Refineries operated at 93.6% of capacity–> thats the highest number I’ve seen all summer.
** Gasoline stockpiles increased by 700,000 barrels. Traders were looking for a DROP of 400,000.
** Distillate stockpiles (heating oil, diesel) increased by 3.1 million barrels. THAT IS HUGE! Look for diesel to come down a few cents due to that.
** Crude oil inventories fell by 2.2 million barrels, but thats to be expected when you refine at 93.6% of capacity. We are still “WELL ABOVE” the average range for oil, so thats no big deal.
If this hurricane season stays quiet and–AND— if we see Iran calm down or MAKE A DEAL with the U.S. there is no reason that I can rule out $1.XX gasoline in the near future. HOWEVER, with Iran being so hard to work with, I don’t expect a easy solution to that.
Anyway, I’m looking for the gasoline futures to have a sell-off today, as a result ofÂ 1. MUCH less active hurricane season 2. No immediate Iran problem 3. VERY HIGH inventories
We could see 2.25-2.29 by early next week if we see a nice selloff today