Here comes $2 gasoline?

http://money.cnn.com/2016/07/25/investing/gas-glut-gasoline-prices/index.html?section=money_markets&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_markets+%28CNNMoney%3A+Markets%29

Now’s the time to plan that cross-country road trip.

Newsletter

Zero spam.

Summer gas prices haven’t been this cheap since 2004 — and there are growing signs they could slip even lower.

As you might have guessed, cheap gas is being fueled by sub-$50 oil prices. But there’s another hidden force at play: a serious oversupply problem. It seems that the well-chronicled glut in crude oil has spread to gasoline and other products.

3rd Party Advertisement

Despite the fact that it’s the heart of summer driving season, the U.S. is sitting on 241 million barrels of gasoline in storage. That’s the highest level for this time of the year since the government began tracking this metric in 1990.

In fact, the only other times that gasoline stockpiles were this lofty were in the dead of winter, in early 2015 and early 2016, when Americans drive far less.

Here comes $2 gasoline?

That’s music to the ears of American drivers. Nationwide, average gas prices dropped to $2.18 a gallon on Friday, according to AAA. Compare that with $2.32 a gallon last month and about $2.75 this time last summer. Tom Kloza, global head of energy analysis at the Oil Price Information Service, predicted that gasoline prices could soon dip below $2 a gallon for most of the country.

“We’re going to have a chapter of very, very cheap fuel,” Kloza said.

The excess gasoline sloshing around in storage tanks should also provide a nice buffer for consumers in case a major storm disrupts the energy industry this hurricane season.

So why are gasoline inventories so high? It’s not because there’s less demand. Kloza said July was a record-high month as Americans guzzled on cheap prices by driving more.


Read Original Story...
HEADLINES
Canada, Mexico and Japan want to revive the Trans-Pacific Partnership free trade deal
Defense stocks at record highs after Trump signs $110 billion arms deal with Saudi Arabia
Trump’s proposal to sell oil reserve shows decline in reliance on imports, weaning off OPEC crude
Japan, Trans-Pacific Partnership members to pursue trade deal without the U.S.
OPEC seen extending output cuts as Saudi Arabia says most members on board
Oil prices rise as OPEC, other producers are expected to extend, deepen supply cuts
About Kelvin Ching

I'm a professional Forex trader and I have been trading for over 7 years. I was a series 3 broker and a registered CTA with the NFA, the main regulatory agency in the United States, and I have been involved at the highest levels in commodity trading. I also have a background in Information Technology, graphics design, and programming... I'm the co-founder of CurrencyNewsTrading.com, a site dedicated to fundamental analysis and news trading.

Speak Your Mind

*

Newsletter

Zero spam.