tracking gasoline prices flared up Friday as futures surged 3.5%
on tight supplies in the storm-ravaged Northeast and expectations
of the region's slow recovery boosting demand.
But analysts believe the spike is just a knee-jerk reaction to
Superstorm Sandy as ample U.S. supplies have led to lower pump
prices in the past month.
United States Gasoline (
) -- the largest ETF tracking gasoline futures -- soared 3.8% to
56.53. It ended the week up 4.98% as it snapped a four-week
losing streak in which it collapsed 14% from its 52-week high. It
rebounded off of its long-term 200-day average, but it's still
trading below its 50-day line, so the short-term trend is
United States Oil Fund (
), tracking West Texas Intermediate crude oil, added 1.37% to
31.73 as it bounced off of a four-month low. It's trading below
both of its 50- and 200-day moving averages, which is very
"In the short-term, gasoline consumption in the Northeast is
recovering much faster than refining capacity coming back
online," Stephen Johnston, a partner at Calgary, Canada-based
Agcapita Partners, which specializes in investing in oil
An uptrend can hold until Northeast refiners resume production
once electric power is fully restored in the region, Johnston
added. But if prices rise much further in the Northeast,
retailers will likely draw supplies from other parts of the
country, which would control price increases.
Nationally, regular gasoline prices have fallen nearly 8 cents
a gallon in the past week and 36 cents in the past four weeks to
$3.39 a gallon, according to the U.S. Energy Information
Administration. Prices are just 7 cents higher from a year ago.
U.S. gasoline stockpiles rose 3.6% in the past month to 202.4
million barrels as of Nov. 2. National supplies are nearly the
same as the year-ago period.
"It's a complete head fake. Gasoline demand is average to
below-average longer term, and we have a huge inventory build,"
said Tim Gramatovich, chief investment officer at Peritus Asset
Management in Santa Barbara, Calif., with $300 million under
Some technical analysts believe the price charts look bearish
"Despite today's positive performance, UGA is consolidating
the October down move in the form of a 'bear flag' (chart
pattern)," said Zev Spiro, CEO and chief market technician at
Orips Research in New York. "The consolidation began in late
October and a confirmed break below the $54 (a share) area would
likely continue the minor downtrend and result in accelerated