Sunday, April 16, 2006

$70 Oil and Gasoline

by Bill McBride on 4/16/2006 11:57:00 PM

My post on Angry Bear: $70 Oil.

The spot price for wholesale unleaded gasoline just hit $2.12 per gallon, up almost 15 cents in the last week. The gasoline balance in charts from the DOE's This Week In Petroleum.

Domestic gasoline production is still below 2005 levels for the same period. Falling production is a typical pattern for this time of year as refineries shift blends. Also, according to the DOE, there has been "unusually high refinery maintenance in the U.S. ... this spring".

Luckily gasoline imports are still higher than last year. Of course this adds to the trade deficit.

Meanwhile the demand for gasoline keeps rising.

And the end result is falling stocks. However stocks are still in the normal range for this time of year, and domestic production should increase over the next few weeks. Still a 15 cent rise in the wholesale price should lead to higher prices at the pump in the next couple of weeks. Gasoline is already close to $3.00 per gallon for regular unleaded in my town.