Gasoline soars after refinery shutdowns announced

Trying to find the light

Is there any light at the end of this tunnel? Instead of a decisive plan to bailout Greece, questions still linger while we try to decide whether this European crisis will end nicely. It just goes on and on.

Iran also does not seem to be as scary on Monday. Weapon inspections are raising hopes that there may be a resolution to this crisis. It seems that according to the AP, "Iran's official news agency reports that the country's foreign minister has said that inspectors from the U.N.'s nuclear watchdog can extend an ongoing visit to the Islamic Republic." The Monday report by IRNA says Ali Akbar Salehi told Turkish TRT TV in Addis Ababa, Ethiopia, that the three-day visit by International Atomic Energy Agency inspectors that started Sunday can be extended "if they desire." The remarks appear to be part of a show of flexibility and transparency by Tehran during the IAEA inspection tour, which could greatly influence the direction and urgency of U.S.-led efforts to rein in Iran's ability to enrich uranium. The West suspects Iran is pursuing weapons technology. Iran says its program is for peaceful purposes.

Gas prices soared as Bloomberg News reported that, "Hedge funds boosted bullish gasoline bets to a record as the shutdown of refineries accounting for 24% of U.S. East Coast capacity spurred concern that fuel supplies in the region will be insufficient to meet demand. Gasoline rose to a five-month high last week as the funds and other large speculators increased wagers on rising prices to the highest level in data going back to June 2006, the Commodity Futures Trading Commission’s Commitment of Traders report on Jan. 27 showed. Futures have climbed 9% this year on the New York Mercantile Exchange as Sunoco Inc. and ConocoPhillips shut unprofitable refineries in Pennsylvania with a combined capacity of 384,000 barrels a day. Hovensa LLC, a partnership of Hess Corp. and Petroleos de Venezuela SA, said Jan. 18 that it will close its U.S. Virgin Island plant next month, idling 350,000 barrels of daily capacity supplying the East Coast."

Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at pflynn@pfgbest.com.

About the Author
Phil Flynn

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.

 

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