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- 25 May
Fuel Pricing Speculative Bubble Over
The fuel price speculative bubble is over, and the market is correcting now, according to Stephen Schork, president of Pennsylvania-based energy consultant The Schork Group Inc.
Bloomberg Business Week today reported that pump prices were $1.66 a gallon over crude oil futures in New York on May 6, the largest premium since September 2008, according to data compiled by Bloomberg. That compares with an average of 95 cents in the past five years. In 2008, it took two months for the gap to return to average.
The $4 per gallon U.S. gas prices are deterring motorists from driving, causing a 2% decrease in demand compared to last year, and likely a lower fuel prices by July. While gasoline prices may not be down by Memorial Day on May 30, history suggests they will be lower by July 4, when 32 million typically take to the roads for the Independence Day holiday.
From a Fuel Price Management perspective, that means volumes may be lower in May, but are likely to increase just as wholesale costs decrease, along with retail fuel price averages.
Read the complete Bloomberg article here.
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