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This Week’s Summary:
This is normally a very predictable time of year if you ask me for gasoline price projection for the coming summer.
But this is not going to be a normal run up to the driving season.
This being the shoulder season for demand for gasoline and distillates usually means low demand activity, refineries in response use this time of year to undergo seasonal maintenance.
This creates panic calls as inventories of gasoline fall because production slows. Traders then say that supply will be a problem and prices spike normally from mid March to the first week in April.
Alas by the start of May the sky once again didn’t fall and prices retreat for the balance of the summer.
This spring and summer is looking very different.
Demand for refined products (gasoline, diesel and jet fuel) are at historically high levels for this time of year.
Crude inventories are falling instead of increasing even with refinery runs beginning to slow.
This means that the seasonal and temporary spike In gas prices is coming early and may stay late.
Supporting a “higher price and soon” call is the Aramco IPO In some say June, which needs a high crude price and the falling US dollar which seems to be encouraged by the Trump administration. As the dollar falls money goes out of treasuries and into commodities such as crude oil and its refined derivatives. This will increase the prices of gasoline much earlier that usual and for longer than usual.
Roger McKnight, Chief Petroleum Analyst
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