Bob van der Valk

Prepare for a Drop in Diesel and Gasoline Prices

Yank - Before passing judgment on my forecasts please read my articles published on Seeking Alpha earlier this year. My theory that gasoline prices are now driving crude oil prices has been true since about a year ago. The US refineries are now in the middle of switching from producing summer to making winter gasoline. That puts an extra 10% of gasoline supply into the market, which is currently running flat on demand. Major oil companies are stuck with the Last In/First Out method of accounting for finished inventories by the end of each year. The same thing occurred at this time last year and the rest as they say is history. Crude oil eventually followed the free fall in gasoline prices and after bottoming out in the early part of this year regained strength in March when - guess what? - US refineries have to switch to making summer gasoline