Major Gas Price Hike Coming (Video)
Interesting clip on Tech Ticker today regarding gas and oil prices. Recently we showed how gas and oil prices have diverged and now it seems that gas supplies are at multi-year lows which is set to spur on a big jump in prices at the pump.
From Tech Ticker:
With the economy tumbling, joblessness rising, and the stock market at 11-year lows, about the only positive thing for Americans’ pocketbooks lately has been (relatively) lower gas prices. But this too shall pass, according to James Cordier, president of Liberty Trading Group in Tampa.
Corider, whose firm specializes in selling options on commodities, notes that while oil supplies are at a 16-year high, gasoline inventories are at a 5-year low. So when demand rises with the summer driving season – which he says it will even as many Americans opt for “staycations” – expect prices at the pump to rise 20-30 cents per gallon.
If you’re looking for a villain in this scenario, the refiners fit the bill; they have kept capacity idle in anticipation of the coming demand and hope to profit from the widening crack spread – or the difference in price between crude oil and refined products.
James trades only options and reveals his strategies in the interview but for those investors that stick with stocks James recommends taking a look at oil refining stocks such as Valero (VLO) and Sunoco (SUN). Other stocks that fit the mold include Hess (HES) and Chevron (CVX).
Video is below. NOTE: RSS and email subscribers view the full post on the site to watch the clip.
Source:
Prepare Yourself for Higher Gas Prices
Aaron Task
Yahoo Finance Tech Ticker, Feb 24, 2009
