Wall St. Journal/Money Beat

Gasoline Prices Accelerate for Summer — Energy Journal

6:29 am ET / May 8, 2015

 

Friedman reports. Much of the increase has been spurred by a rebound in crude oil, but prices are
also climbing ahead of strong demand during the U.S. summer driving season, which typically
lasts from Memorial Day in late May through Labor Day in early September. Continued low
prices, combined with a relatively stable jobs market, are likely to entice more Americans to hit
the road this summer, in turn keeping prices in the gasoline-futures market higher, investors said.


Still, gasoline remains cheaper than in recent years. A gallon averaged $2.65 nationwide on
Thursday, according to motor club AAA. Prices at the pump are still more than $1 a gallon
below the levels of a year ago, and many analysts forecast that gasoline will remain below $3 a
gallon for the rest of 2015.


Regarding the jobs market, the U.S. April jobs report, due out later Friday, is expected to show a
solid payroll gain of 228,000 and an unemployment rate of 5.4%, down from March’s 5.5%. But
the number of oil-and-gas jobs has slipped 1.5% since October amid the crude price drop, and
further job cuts will indicate if more industry problems are on the way.


OIL ON DERAILED TRAIN SAID TO MEET RULE
The crude oil aboard the train that derailed and burst into flames in North Dakota on Wednesday
had been treated to reduce its volatility, said John Roper, a spokesman for the shipper, Hess
Corp. He said the crude complied with a new state rule requiring the treatment of crude oil,
intended to make it less prone to explode. North Dakota officials approved the treatment rule last
year after several trains carrying oil from the state’s Bakken Shale erupted into flames after
derailing. Some critics said the rule isn’t tough enough and have asked that companies be
required to strip out more gases.


Separately, U.K. energy company BG Group reported a drop in profit, but the number still beat
expectations, the Financial Times reports.


MARKETS
Oil prices swung between gains and losses Friday ahead of the latest U.S. jobs report, which will
determine the short-term direction of the dollar. As oil is priced in dollars, the currency’s swings
have a significant impact on oil prices. The Wall Street Journal Dollar Index, which tracks the
dollar against a basket of other currencies, was up 0.1%. Brent crude for June delivery fell 0.1%
to $65.45 a barrel on London’s ICE Futures exchange after rising earlier in the session. On the
New York Mercantile Exchange, light, sweet crude futures for delivery in June were trading at
$59.07 a barrel, up 0.2% from Thursday’s settlement. Read our latest market report at wsj.com.


FUTURES AND OPTIONS TRADING INVOLVE SIGNIFICANT RISK OF LOSS AND
MAY NOT BE SUITABLE FOR EVERYONE. OPTIONS, CASH AND FUTURES
MARKETS ARE SEPARATE AND DISTINCT AND DO NOT NECESSARILY
RESPOND IN THE SAME WAY TO SIMILAR MARKETS STIMULUS. A MOVEMENT
IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE
RELATED FUTURES & OPTIONS CONTRACT BEING OFFERED. SEASONAL
DEMAND AND CURRENT NEWS IN COMMODITIES ARE ALREADY REFLECTED
IN THE PRICE OF THE UNDERLYING FUTURES.