reached an all time high for the end of January. was $3.40 per gallon. In Ontario, the price of regular gasoline jumped to $1.29 per litre. Why are gasoline prices rising and where are they going from here?
The period of seasonal strength for unleaded gasoline is just starting. Its optimal period of seasonal strength is from the end of January to the end of April. However, the period of seasonal strength occasionally can extend into June. cheap jerseys Unleaded gasoline prices from the end of January to the end of April have averaged a gain of 21.9 per cent per period. The trade has been profitable in 14 of the past 15 periods.
The annual recurring event that triggers strength during the optimal period is the transition by refiners to convert gasoline to a summer blend from a winter blend. Inventories of summer blend are accumulated prior to peak demand during the Memorial Day holiday at the end of May. Most refiners also use this period to complete their annual maintenance. Frequently, annual maintenance leads to unexpected shutdowns and occasional significant breakdowns and fires. refineries are old and require an increasing amount of maintenance. already are slightly lower than their five year range at the end of January setting the stage for an earlier than usual spike in prices. In addition prices for regular gasoline are increasing at a faster than average rate this spring because of two unique events. east coast has been reduced slightly on news last week that Hess plans to shut down permanently its Port Reading refinery in Woodbridge New Jersey. Second, demand for unleaded gasoline has been increasing following an announcement in December by the American Automotive Association (AAA) that using E15 gasoline in autos manufactured prior to 2010 can damage your engine due to corrosion. Net result is that users of autos manufactured prior to 2010 are choosing to buy regular gasoline instead of E15 gasoline and auto buyers are choosing to buy new cars rather than purchase cars manufactured prior to 2010. new auto sales announced last week reached the highest annualized level in January since 2007. Meanwhile, the spring auto buying season is just starting.
On the charts, the wholesale price of unleaded gasoline, better known by traders as RBOB already is in gear. Gasoline prices closed at an eight month closing high on Friday. Intermediate trend is up. RBOB trades above its 20, 50 and 200 day moving averages. Strength relative to the S 500 Index turned positive in mid January. This spring, the wholesale price of gasoline likely will pass its all time high at $3.63 per gallon set in the spring of 2008. If the cost of distribution at $0.50 per gallon is maintained, an average retail price of $4.13 per gallon is anticipated. dollar.