Thanks Hawk, Unleaded Gasoline Futures are down are down 38%
in 1 month and three days. the June contract for Gasoline
made a high of 117.5 on May 24th basis the June contract,
going into Memorial Day.
We have seen one of the biggest declines in price ever over
the past month. Today we touched a low of .72 cents at 1.30
this afternoon, basis the most active August contract.
This will have a favorable impact on the economy going
forward, and the magnitude of the decline has most certainly
not become evident at the gas pump yet, yes prices are down,
but they'll continue to work there way lower in a lagging
fashion over the next several weeks.
Other energy prices have come down as well,Crude has also
come down since Memorial Day from the 31 area down to 26
today.
Obviously with Gasoline, the market worked in that the
historic all time high prices of May and the high levels
we've seen all year, lead to more production of distillates
including Gasoline and heating oil, more crude production,
especially by OPEC. We also undoubtedly saw reduced usage
through conservation as prices rose.
The Airline stocks should be beneficiaries of this price
decline, and are certainly not reflecting this yet, although
they do have the cross currents of a softer economy, less
business traveling, and greater price competition, due to
internet price shopping.
One can speculate that even a stock like F may benefit over
the next 4 months as, lower Gasoline prices, may rekindle
interest in their SUV's and light trucks. Those vehicles
have the highest profit margins and the fence sitters on
buying gas guzzlers decide that Gasoline is not going to
$3 dollars at the pump.
I'm also giving thought to other beneficiaries of lower
fuel costs and would love to hear suggestions if anyone has
any.
John |
