Its easy to say that crude oil prices are much more volatile these days than years and decades ago. Its more difficult, however, to tell you exactly what is influencing prices at any given time.
After crude oil and gasoline prices dropped some 20 cents per gallon, they look to rebound as feelings about an improved economy and higher oil demand sway to the positive. It certainly doesn't help that investors were reminded of hurricane season today. The National Hurricane Center (NHC) released an image showing the potential for a storm system to turn into a tropical storm, pegging odds at 30-50%. While it certainly doesn't seem to be a big deal at all, it simply reminds us of potential.
Billions of dollars of damage were caused by several hurricanes the past few years, heightening concerns about hurricane season. A decade ago, it seemed that this time of year wasn't a concern. Katrina changed that in 2005 when the storm ripped through the Gulf, destroying oil rigs, oil refineries, and much more of the oil industry. Gasoline supply was immediately impacted, and it took months to make repairs.
We'll be sure to track any storms for you using our mapping technology to show potential impacts should any storm threaten vital areas of the oil industry.
Beyond the hurricane threat, it seems the situation in Europe with debt concerns have ebbed. However, Japan may be a coming concern, as authorities there have stated they must keep an eye on debt.
It seems that this week traders are focusing more on economic improvements and hurricane threats, pushing oil and gasoline prices higher. While I believe the U.S. gasoline price average will rise, I don't believe we'll see a large rise. For the most part, barring major storms, I believe we'll stay within a dime of where we are now for the next few weeks.