Crude Oil Falls Below $55
A host of refinery stoppages in Louisiana and Texas last week generated a market rally for gasoline prices that still reverberates, despite data showing gasoline inventories are the highest in three years.
Another indicator showing oil and gas prices could rise into the fourth quarter is the relatively high cost of energy futures compared with spot prices. Normally, contract prices decline with time, as uncertainty about the future leads to discounting.
In the energy market today, future month contracts are trading at a premium. For example, the November crude future contract is trading upward of $57 a barrel, while today's spot prices are near $55.
Analysts say the trend shows that market players are expecting demand and energy prices to rise in the short- and midterm."This is very unusual. There is too much crude but not enough refining and products, and no one is certain if the U.S.'s and China's economies are really growing or slowing. It's really strange," says Rick Thompson, energy trader at Alaron Trading. Thompson says oil producers have already locked in prices for the summer contracts and stored their supply for later delivery. "Companies have already traded on the
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