Rakesh Shankar Prices Quotations

This report marks a healthy start to the gasoline buildup for the summer driving season. A few more weeks of this kind of healthy build will help further assure the market that gasoline prices this summer will head south.

The possibility of a warmer than expected summer, along with a spike in crude oil prices and a freak heat wave in Texas that led to a surge in demand for natural gas all helped boost natural gas futures prices to well above $8 this week. Prices look to stay there in the near term, despite the record inventories.

Gasoline prices are bound to rise further in the near term as the summer driving season kicks in.

For nearly five straight weeks, the EIA stock report has now surprised the market with inventory numbers on the upside. As a result, prices for crude especially will revert to the lower numbers seen in December.

The ample supply of stocks for all energy products should continue to place downward pressure on prices in the near term.

There is a real risk that U.S. refineries will be unable to sufficiently bring back capacity in time for the summer driving season. This will force increased reliance on gasoline imports, and higher prices for consumers.

At this pace, all the pieces are in place for both total crude and gasoline prices to ease before the peak summer driving season sets in, as we expect.

Sturdy product inventories should help to temper market fears of energy shortages, and should help cajole broader energy prices lower in the next few weeks.