February 15, 2012

WHAT DO GAS PRICES EVER HAVE TO DO WITH DEMAND?:

Rising Gas Prices: Not Demand Driven (Matthew Philips, 2/14/12, Business Week)

Strangely, the current run-up in prices comes despite sinking demand in the U.S. "Petrol demand is as low as it's been since April 1997," says Tom Kloza, chief oil analyst for the Oil Price Information Service. "People are properly puzzled by the fact that we're using less gas than we have in years, yet we're paying more."

Kloza believes much of the increase is due to speculative money that's flowed into gasoline futures contracts since the beginning of the year, mostly from hedge funds and large money managers. "We've seen about $11 billion of speculative money come in on the long side of gas futures," he says. "Each of the last three weeks we've seen a record net long position being taken."

Posted by at February 15, 2012 5:54 AM
  

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