Summer time heralds warm weather, beach outings, barbeques and vacations. But it usually ushers in higher prices at the pump as well. This season, however, the expected uptick at the pump may not materialize, in what may be a favorable outcome for our wallets, but not so much for gas exchange traded funds (ETFs).
According to Pablo Gorondi, Alex Kennedy, Holbrook Mohr and Alan Sayre of the Associated Press, the price of oil fell by more than 10% during the week before Mother’s Day. Gasoline futures also fell sharply, which could soon be reflected in lower prices at the pump.
A barrel of crude oil settled at $75.11 on Friday- the lowest spot price since mid-February. [MLP ETNs: Another Source of Income?]
Even with hundreds of thousands of barrels of crude oil spilling into the Gulf of Mexico, the government reported a build of 2.52 million barrels of oil in the region. A report from energy consultancy Cameron Hanover states, “The implication here is that the Deepwater Horizon spill is having no tangible impact on imports and even if it does, stock levels can comfortably absorb any knock-on shocks.” [Oil Spill Puts Oil ETFs in Focus.]