The gasoline futures for October delivery broke above the psychological level of $3 per gallon yesterday. Summer was the starting point for the current price rally. Since the June low, the price has increased by 75 cents.
Summer Overview By
The gasoline market was bearish in early summer amid uncertainty and concerns connected with eurozone crisis and economic decline around the globe. However, the seasonal factor constant supported the price. Therefore, the market was uncertain as the price was going to and fro within the 2,350-2,469 range.
In late June, the price dropped down to the 2,209 - 2,241 area. Then it formed price range between 2,219 and 2,277.
However, a week later the price started rallying on concerns over the situation around Iran. By July 4th, the price had already reached $2,471 per gallon. The rally was followed by a period of stabilization. On July 9th, the rally resumed. Late June showed a short-term 3-4% decline on the strengthening of the US Dollar.
In August, the market was mainly bullish. The growth was supported by relatively positive economic states coming from the USA and some other major economies. As a result, the price reached the 2,950-2,962 area in late August.
Consequences And Conclusions
The following factors drove the market of gasoline in summer:
· Further economic stimuli in the USA.
· Natural and man-made disasters.
· Forex volatility (US Dollar, in particular).
· Low efficiency of anti-crisis measures in Europe
· Instability in the Middle East.
As for the near-term outlook, the bullish tendency is most likely to continue till the end of 2012. October is the only month when oil prices may go down a bit on seasonality.
