Traders bet on higher gasoline prices

[Newsjock]

Source: Reuters

Some of the boldest speculative oil traders at banks and hedge funds are betting on a return of gasoline's strength ahead of peak summer demand, bringing an early shift to summer from winter to the oil market.

... Unusually cold winter weather and a belief in resurgent gasoline demand this summer has lured traders back onto the seasonal play after 2009's relatively flat demand picture, analysts and traders said.

“We have seen massive speculative inflows this year and this has helped boost the gasoline premium over distillates,” said Olivier Jakob of Petromatrix. “It is trying to price in the gasoline season a bit early.”

... Open interest on U.S. RBOB gasoline futures rose 76.5 per cent above last year's levels to 264,600 lots in February as speculative players increased length, the U.S. Commodity Futures Trading Commission said in a report.

Non-commercial players made up 29 per cent of open interest on RBOB gasoline futures in February, compared with 24 percent a year earlier, the report showed.

... Traders at banks such as Morgan Stanley and J.P. Morgan are also big players, they said.

Read more: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/traders-bet-on-higher-gasoline-prices/article1494832/

[DJ13]

1. ..... and since their speculation can make it happen.......

[Tippy]

3. Hell it is already happening ...up 30 cents a gallon here in the last 5 days...

[demosincebirth]

2. High gas prices can really dampen an economic recovery

[upi402]

4. Yep, part of the reason there is no recovery

Kucinich is right, we need jobs now! We need to redo NAFTA and GATT now. And we could create alternative energy jobs if we had one party we could vote into power that was not beholden to big oil, etc.

The DOW rising is not a recovery, just a symptom of the disease of Ponzi capitalism. Slowing job loss is still losing jobs - not gaining.

[Mari333]

5. the desperation here in michigan is palpable

dollar stores are sprouting up, other places closing down. there are no jobs. add this to the mix, and it is becoming volatile.

[louis-t]

6. There is an undeground economy here.

I have seen hundreds of vacant houses, not one of them has a furnace or any copper left in them., They are stealing sinks, toilets, doorknobs, hot water tanks, electrical wire, and water meters. People are learning how to move into bank-owned property and play the system so they have a place to live for 90 days. On their way out, they steal anything left that's not nailed down.

[Mari333]

8. and I have people coming to my door begging for jobs

some even asking me for free money. I turn everyone away. and I live in a small not important looking house.

really ugly out there.

[demosincebirth]

9. Sad.

[Alias Dictus Tyrant]

7. It is also a hedge against inflation.

Traders frequently dump their money in commodities if they think a currency is going to be devalued. The commodities have a value independent of the currency. This has a side effect of driving up commodity futures prices due to increased demand.