gasoline futures brokers

gasoline futures brokers

February 3rd, 2015

Gasoline Futures – That decline in fuel prices that’s given millions of consumers across America reason to cheer? It looks like it’s running out of gas.

The average per-gallon pump price for gasoline in the U.S. on Monday rose for the seventh straight day to $2.06, according to AAA. That follows 123 straight days of declines, a record, according to the motor club. Retail gasoline prices hit a nearly six-year low of $2.03 on Jan. 26.

Seasonal trends in gasoline production and demand are a big factor behind the stabilization in prices. Refineries tend to scale back operations to make repairs in the first and second quarters, which curbs supplies. And consumption typically rises in the second quarter as the weather improves and people start driving more.

It’s likely that gasoline prices have bottomed out for now, some experts say. To be sure, prices remain well below year-ago levels.

“It is a good bet that most drivers will pay more for gasoline in March than today,” said AAA spokesman Avery Ash in a statement.

Traders are closely watching a worker strike affecting refineries that produce nearly 10% of the nation’s fuels. The refiners say they plan to use nonunion labor to keep the refineries running, but any drop in production could push up fuel prices.

Gasoline futures jumped 4.4% to $1.5446 a gallon Monday, one day after the strike was declared. That was the highest settlement price since Dec. 23. U.S. oil prices also rose, by 2.8% to $49.57 a barrel.

Crude-oil prices are sensitive to petroleum-product prices. Higher gasoline prices could make it more profitable for refineries to make gasoline, prompting them to buy more crude oil and increase production.

Gasoline prices dropped sharply in recent months as crude-oil prices plummeted, giving U.S. drivers a welcome boost. The U.S. Energy Information Administration expects prices at the pump to average $2.33 a gallon this year, down from $3.36 a gallon last year.

The national average retail price could rise to about $2.50 a gallon in the spring as demand rises ahead of the busy summer-driving season, said Tom Kloza, global head of energy analysis at the Oil Price Information Service.

Still, gasoline supplies are ample in the U.S., which could cap any price rally. Inventories hit their highest level since February 2011 in the week ended Jan. 16, according to the EIA, before falling slightly the following week.

Retail gasoline currently costs $1.22 a gallon less than a year ago, and AAA says the fuel will continue to cost at least $1 below seasonal norms.

“I wouldn’t recommend that gasoline retailers throw away those $1 numbers for the first digit on their price signs,” Mr. Kloza said in an email.

- Dow Jones.