Oil (NYMEX:CLK14) prices that were falling on a weak stock market and the potential for a return of Libyan oil now will find support from the increased tensions. The gold market that does not have to balance the threat against the impact on the economy and oversupply like is reacting more dramatically to the news.
Oil also will focus on inventories. Gas (NYMEX:HPK14) inventories will continue to dutifully fall as refiners gear up to sell us those summer blends of gasoline. We are looking at oil supply to fall as the Houston shipping Channel will still take its toll on Imports. Next week we should see a big rebound on Gasoline should fall by 1.5 million barrels and distillates down 500K! Refining runs should be steady. Midwest diesel prices have been rising so the market will not like the fact that supply may fall again. Ethanol prices higher again and the focus will be on supply that rose last week.
A new survey by AAA says that Americans have grown significantly less likely to change their driving habits or lifestyle to offset gasoline prices. AAA says that only half of adults in the United States, 53%, are doing something to offset gas prices, which is about 15% less than in spring 2013. The survey also shows that 40% believe gas is too high when prices reached $3.00 gallon; 50% believe gas is too high when the price reaches $3.30 gallon; 65% believe gas is too high when the price reaches $3.50 gallon; and 91% believe gas is too high when the price reaches $4.00 gallon.
Natural gas is rising. Is it the weather or are people waking up to the fact that we may have a big problem when it comes to filling storage. Most producers say they are cutting back on production so something has to happen on the price side to change their minds. We may be getting ready to pop!