Wednesday, July 09, 2008

Iran Tests Missile: Oil Goes Up

Sure enough the Iranians pop off a few missiles and oil prices go up. Luckily for everyone who isn't long oil the market settled down once the Supply Report showed that gas stores built up yet again.

Gasoline inventories were up by 900,000 barrels for the week, nearly double the 500,000-barrel boost expected by Platts. Over the holiday, gasoline stocks usually decline or are flat.

The rise in supplies "implied demand for gasoline is tapering off," said Tom Orr, head of research for Weeden & Co.

I think $4 gas is some kind of break point when it comes to gasoline supply/demand. People will just drive less and start to change their behavior and buy smaller cars to compensate.

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