Sunday, December 17, 2006

Retail gasoline price mini-spike may or may not have peaked

Gasoline futures rose significantly this past week. This may simply have been due to the chattering about OPEC cutting production quotas and the rise of crude oil futures, or there may actually be some renewed strength in demand at the retail level. Speculators may be betting on extra travel for pre-holiday shopping. If all that shopping is occurring, that is a bullish sign for the economy.

The retail price of gasoline may or may not continue its recent mini-spike. We could see prices rise a bit more, but there is a reasonable chance that prices will soon begin to decline again.

-- Jack Krupansky

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