Is Oil Set to Surge Once More?

On the demand side things simply will not calm down. U.S. gasoline demand keeps going up. Last month saw a rise of 1.1% year on year to over 9.1 million barrels a day. Gasoline futures contracts went up 23 cents in one week. The current U.S. pump price is edging back up at $2.36. Other refined products including heating fuels also saw demand rise, despite the mild winter. They were up 2.3% year on year.

Outside of the U.S. Chinese demand is still on the move. Up 6% against this time last year the only hope is that the Chinese government restrain prices. This means China actually exports refined products as the market is a loss maker for Chinese refiners. It is a form of rationing that leads to power cuts and austerity for Chinese people. But it might help the rest of the world.

Resource Investor