Gasoline ETFs have pulled back from the mutliyear high reached in October while trading volume in the products has also trailed off.
Still, gasoline futures rose 3% at the close of last week, implying prices could rise again on tight demand. Exchange traded funds can help hedge the hit to consumers’ pockets, however, analysts are calling this a short term trend.
“In the short-term, gasoline consumption in the Northeast is recovering much faster than refining capacity coming back online,” Stephen Johnston, a partner at Agcapita Partners, said in a report. [Five ETF Sectors to Watch After Hurricane Sandy]
The recent uptick in gasoline futures prices is reactionary to Superstorm Sandy, as U.S. supplies were ample before the storm. Prices had just started to settle lower prior to the disaster in the Eastern U.S. Until electrical power is available to the Northeast, refiners can not resume production. Should prices rise higher in the region, supplies will be gathered from other parts of the U.S. to control any price spikes, reports Trang Ho for Investor’s Business Daily.