Oil prices are pulling back and it appears that gas prices have hit a top, but not if the Obama administration has something to say about it. Oil prices are weaker on China's PMI, which rose to a less than expected 50.9 in March. The number failed to inspire petroleum buying but it was a slight improvement over February.
The Environmental Protection Agency says it wants to reduce the amount of sulfur in gasoline to an average of 10 parts per million, down from the current standard of 30 parts per million, which might be good for the environment but they are lying to the American Public about how much it might cost. Tier 3 standards would reduce sulfur in gasoline by more than 60% and reduce nitrogen oxides by 80%. Yet it would also increase the cost at a minimum of 9 to 10 cents a gallon, but the EPA says it would only be a penny.
The EPA has lied to us before about the cost of regulation. You only have to go back to the switchover of diesel to ultra-low sulfur diesel. Remember that was only supposed to cost a couple of pennies. Truckers of course know that that was a lie. Diesel soon became more expensive than gasoline and it is clear that for political purposes the EPA deliberately misled the public.
The EPA needs to come clean with the American People. If they really believe that this gas is vital to our health and wellbeing, then tell us the truth about what it will cost. We don't need to be lied to even if the government thinks it is for our own good.
Natural gas also saw some profit taking but that is great opportunity to position for a longer-term bullish outlook. Natural gas has broken out from a long-term multi-year formation.