The fuel dealers’ newsletter Oil Express sent around a bulletin today that shows who’s still gyrating the price of oil, gasoline and diesel. The headline: Gasoline, Diesel, Crude Ride Surge in Wild Thursday Trading. Prices spiked up to 10 cents a gallon for wholesale gasoline, and $5 a barrel for crude oil. The culprits? Futures market trading. Oil is in oversupply and fuels are in ample supply, which would be pushing prices down if the market responded to supply and demand.
The whole story is behind a subscription barrier, but here’s the lead:
Spot prices for refined products moved up as much as 10cts gal in Thursday afternoon trading, and crude oil was up nearly $5 bbl at one point in a move that couldn’t be explained by anything in the fundamental universe of supply and demand. The surge appeared to be provoked by some aggressive short covering in futures’ markets, and was not necessarily accompanied by any changes in the U.S. refining and downstream dynamic.
Just another reason that the White House and Congress have to move faster on regulating speculative markets before fuel prices hit the next price roller coaster.