Is the end near for the decline in gasoline prices that has lasted some 37-days? It may be, all thanks to sudden optimism that the fed shutdown and debt ceiling situation may soon be over.
Markets soared on the news that politicians were working on a plan, and oil prices gained nearly $2/bbl, even after the EIA yesterday pointed to a large increase in crude supplies, and gasoline supply that stood 12.5% above their year ago level.
Spot gasoline prices, which weigh heavily on wholesale prices, or the price that stations pay, was up double digits per gallon with the Great Lakes market seeing the largest jump thanks to small refinery mishaps. Spot prices across the country were up 8 to 13 cents per gallon, and surely if this holds, it could easily snap the days of consecutive decline we've enjoyed.
It's an odd time of year for a significant rally however, as gasoline demand wanes as cooler temperature invade, but goes to show that in some cases, prices are determined more by emotion than supply and demand fundamentals, the latter of which show lush supply of both crude oil and gasoline.
We'll continue to watch developments that impact oil and gasoline prices, and we're hopeful that today's rally not last long as traders come to their senses that lavish supply outweighs a deal in DC.