Today’s DOE report definitely wasn’t so hot- showing a large loss in gasoline stockpiles when an increase was expected. Traders polled were expecting a small 500,000 barrel increase in gasoline stockpiles and the DOE reported a loss of 2.6 million barrels.
In an interesting twist, supplies in storage in the Midwest region actually rose over a million barrels, which may cause the Midwest to see prices staying under the national average for some time.
Refining continues to be a poor money maker, but with this news, I expect wholesale gasoline prices to climb, causing refiners to slowly increase production due to increasing margins.
Speedway has been all over the map in the Midwest lately, with a hike last week in Minneapolis, and a hike yesterday in the Great Lakes area. While most of the nation should see slowly increasing wholesale prices, the Midwest should feature either flat wholesale prices or rising disproportionately slow compared to the rest of the country.
On another note, Diesel should slowly become cheaper than gasoline in many areas of the country over the next few months as driving season approaches.
States that have recently seen Speedway price hikes (this week) should be stable without a huge price hike (barring some large news maker), but areas outside the Midwest will continue to see prices climb.