Posted in: Forecasts,
by Patrick DeHaan on Mar 10, 2010 02:09 PM
Surprise, surprise. The DOE report today was quite bullish on many fronts, pushing oil prices and gasoline futures up almost immediately. Prices have since fallen back to hold on to small gains. In its Weekly Petroleum Status Report, the DOE outlines higher demand for oil products, lower gasoline and distillate inventories, and crude inventories gaining a respectable amount.
Crude inventories rose 1.4 million barrels while gasoline and distillate fuels fell a combined 5.1 million barrels, an amount that was larger than I had expected. The number may reflect refiners eager to move winter-spec material as temperatures begin to warm.
Also included in the report was demand data that showed motorists increasing appetite for fuels, even against rising prices at pumps across the nation. Overall demand for oil products is again approaching 20 million barrels a day, a number not seen since September, 2009, and a number higher than most of Summer, 2009. This indicates to many analysts, including myself, that while the economy remains weak, consumers are again increasing their consumption of oil based products. This remains a concern to jobless individuals and families struggling because they may be left behind in a broad economic recovery.
According to my data today, many metro areas across the country are showing increasing gasoline margins. This would mean that prices may actually level off here soon, and some metro areas could see a very minor drop in prices (nothing to celebrate). However, some locations in Texas appear ripe for price increases- such cities as Dallas and Houston appear highly likely to see prices swing higher this weekend.
Overall, I'm surprised that gasoline futures and oil prices have relaxed after a short, yet significant morning rally. After the DOE report, oil was up over a dollar while gasoline futures were nearly 5-cents per gallon higher. Oil futures at this hour are up a measly 9-cents per barrel, while gasoline futures are up 1.5-cents per gallon.