Gasoline in Longest Drop This Year Before July 4

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July 3 (Bloomberg) -- Gasoline prices at U.S. Filling stations are tumbling with the approach of the July 4 Independence Day holiday, as the highest stockpiles for this time of year in two decades underline the nation’s growing self-sufficiency in fuel. Alix Steel reports on today's "Futures In Focus" on Bloomberg Television's "Market Makers." (Source: Bloomberg)

Far this year.

Prices are down five percent since may 21, down to $3.47 a gallon.

Rising inventory is the reason.

Highest level since 1992. we saw a drawdown last week, and we are seeing a spike in gasoline future prices, but there is still a tremendous oversupply in the market.

Increased energy self- sufficiency is really leading to the supply and products.

We could see even more relief at the pump.

Our suppliers making more product?

That is part of the story.

Capacity jumping over three percent from last year.

Last week, two percent run rate.

The big name was bp that started 265,000 barrel a day in indiana, the largest in the midwest.

The midwest has gas prices among the lowest in the country.

The gulf coast is home to about 45% of u.s. refining capacity and that is been hit with a massive oversupply.

As long as margins are good, refiners will keep working.

Demand really has not kept up, following in the past month.

Part of that, switch to alternative energy.

It keeps churning.

What about the oversupply in the u.s.? exporting products?

The u.s. is allowed to export product, just not as crude oil.

Valero exported about 87,000 barrels a day of gasoline in the first quarter, mostly south america and mexico, but that was up seven percent from last year.

The question is, how long will we see the cheaper pump prices?

We are seeing crude oil above $100 a barrel.

Some think it could be anywhere from 30-day 260-day lag which is quite a long lag because he says there's so so much supply we have to work off.

That is a longer lifetime than usual.

Usually it is a couple of days, but it is not a complete science.

Interesting, given that oil prices at least overnight and this morning have been rising because all of the concerns over egypt and whether the suez canal could see some disruption from the tensions there.

Part of the story of why we have seen it rise has not been because we have not been getting oil out of cushion by pipeline and rail, so it is really been the increase refiner demand story that results in more product.

It is a cyclical catch-22. but it is good news for us.

Where are you headed?

This text has been automatically generated. It may not be 100% accurate.

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