‘Lumpy’ price action ahead for oil and gas prices, says OPIS forecast
righty meanwhile oil giving up early gains with Brent and West Texas intermediate closing its session lows but crude still posting its fourth weekly gain in a row uh WTI hit its highest level since late April early in the session today this is tropical storm Barrel downgraded from Hurricane status uh heads towards the gulf and the Texas coast area which is of course saturated with oil rigs refiners like Hess Murphy Oil BP putting out statements indicating they don’t anticipate any impacts to their Gulf of Mexico operations Denton sagana is Chief oil Analyst at the oil price information service where do you see Denton welcome first of all uh where do you see o oil going it has been moving higher uh as I guess summer demand pushes it there and where do you see gasoline prices headed yeah well thanks again for having me Tyler I appreciate it yeah I think gasoline prices are are starting to creep higher about 351 today it’s only about Penny cheaper than what it was at this time last year I do think we’re there’s enough market momentum to push prices higher uh throughout the next couple of weeks probably up to about $360 or so uh I know earlier there’s been forecast for $4 I just don’t see that happening unless we have something really go nuts not just necessarily with uh tropical storm which will again become hurricane Barrel but also more uh storm activity this summer so what happens after this little ride in as you said gasoline prices as we get deeper into the summer driving season and then does some seasonality cause both oil and gas prices to drop back just a bit yeah usually once we get through July uh mid August kids start going back to school vacations are essentially over then you start to see demand start to trickle a little bit lower then after Labor Day it really kind of reverses there uh and that’s when you start to see gasoline prices really start to come down and really through the remaining of the Year October November December uh towards the end of the year give you some of your lowest prices of the year which lower prices also coincide with a certain uh early November event called the election called the election we we’re well aware of that D let’s let’s bring in Mike Co for a question yeah Denton uh I I don’t know if you have the answer to this but it’s something that’s piqued my curiosity so environmental regulations have sort of prompted the increase of turbocharged cars turbocharged uh internal combustion engine cars and those more often require premium fuels and we’ve seen the spread between premium gasoline and 87 octane regular basically at all of the spot ports go going higher and so I was kind of curious if you had any ideas on a derivative play because that’s mostly additive based I think are there refiners that are better positioned for that or are there suppliers of those additives that you think could benefit from that Dynamic yeah well the majors they all have their proprietary eddied packages so whether that’s BP shell Chevron they all have their proprietary additives package uh they’re all top tier gasoline so but yeah that premium to to regular spread gets pretty wide this time of year uh but usually the person who is required to drive pre to put premium in their car usually uh the price of gasoline is does not impact them like other other members of society so Tim as we show some of the stocks the big oil companies down today the refiners generally down Tim jump in yeah Denton and I guess leading to that trade which I I’m quite bullish on the integrated players but but to to you know we’re talking about Supply we’re talking about hurricane season we’re talking about seasonal factors but really the demand side of this is a lot more interesting to me and demand based upon what we’ve seeing in terms of North America um is something that’s actually been growing you’ve seen WTI prices up 13 or 14% I don’t think it’s been the supply disruption story can you speak to that can you speak to Global Dynamics on demand because uh also as someone that’s invested around the world especially in Emerging Markets aggregate demand continues to grow uh and and that’s something that I think people forget about sometimes on this trade yeah absolutely and Tim first off love the Ramon poster but you know again where the a lot of this uh demand growth that we’re talking about is in the developing nations oecd Nations we’re we’re leveling off as far as particularly gasoline demand in fact I would make the strong argument that in United States gasoline demand is in in a decline ever since 2019 uh all the demand growth in gasoline is in more developing economies jet fuel demand we’re seeing pretty strong jet fuel demand uh vacation times a lot of people choosing to fly versus Drive uh and then you’ll see some some people say well it’s cheaper for me to drive on take this road trip versus flying so uh but overall I think we’re in a good demand period for now but usually after the 4th of July demand like tends to get really choppy really lumpy if you will you’ll see some really strong weeks uh here in the United States and then you’ll see some ones that make you shake your head as someone who lives near the Jersey Shore like I see millions of cars out here I’m sitting in traffic trying to get to the beach and and then you see a demand number that’s like that makes no sense to me but you know sometimes you your eyes uh aren’t aren’t seeing everything around the world e
Denton Cinquegrana, Oil Price Information Service chief oil analyst, joins ‘Fast Money’ to talk how to play oil prices this summer.
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