There is no shortage of oil, despite an unprecedented number of Middle East/North African nations in varying states of upheaval--a total of 15 countries in all, six of which are Organization of Petroluem Exporting Countries ([image-nocss] OPEC) members. Libya's civil war jolted the oil market even though Saudi Arabia's spare capacity dwarfs Libya's production, and the Saudis have been increasing output to offset the loss.
And there is no shortage of gasoline in the United States, as stocks are still flush. U.S. gasoline demand has been growing weakly, but recent prices may well reverse that trend.
On March 18, it appeared that since crude oil prices had slipped, gasoline price hikes might end or become declines; however, weekend military action against the Libyan regime makes that possibility more remote. Depending on oil trader reaction to the air and submarine strikes, since Libya's production may be crippled for an extended period, oil prices may resume their climb.
Retail gasoline prices, which average 54 cents under the July 2008 all time high, will follow crude wherever it goes.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.
Click herefor previous Lundberg Survey columns in CSP Daily News.
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