Dicker's Gas Price Outlook: Good for Refiners, Bad for Drivers
NEW YORK (TheStreet) -- Spring has finally arrived, and that means that driving season is just around the corner. What can we expect from the gasoline markets during the coming summer? I was talking about gasoline with Jim Cramer this morning.
Few sectors in the general market, much less in energy in particular, have had such a strong run as the refiners in the last several years. Jim and I have used many opportunities to point out that the relative weakness in domestic crude prices has helped the refiners take advantage of a very strong global gasoline price. It has truly been a renaissance for domestic refineries producing gasoline for U.S. consumers.
But the troubles for drivers going into the summer season don't end with prices that will be generally higher than last year. On the retail side, gas station owners have become tired of seeing their supplying refiners make terrific premiums while they get little in the way of premiums for themselves.They've begun employing tricks to make more from each gallon they sell, including adding premiums for credit card sales, sometimes as much as a dollar a gallon. Stations that have relied almost entirely upon repairs and other services are becoming less common, while those that rely upon sales of snacks and coffee have become much more common. This ends up making access for gasoline more difficult. You now have to plan more about where you're going to get a fill-up. In addition, a horrible winter has decimated the roads, making travel slow and more risky. The bridge and tunnel infrastructure in this country continues to break down. In total, it's going to be a rather bad summer for drivers this year, but another good one for refiners. I talk more about refinery stocks and gasoline prices with Jim in the video above.
At the time of publication, Dicker had no holdings in stocks mentioned, but positions can change at any time. Follow @dan_dicker This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
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