Energy Report: The Hedge Funds Are Back

Oil prices are holding up well even as gold gets beat up ahead of the Federal Reserve meeting and the grain market tumbles by then administration is looking to relax biofuel requirements. It appears the trade is waking up to the fact that while big energy companies retreat from production demand is not going to retreat leading us to a tighter and tighter global supply versus demand ratio.

Last week's gasoline demand seemed to disappoint but the implied demand numbers from the Energy Information Administration were likely skewered due to the colonial pipeline mishap. If gasoline demand indeed is weak, you would never know it by pulling up at the gas pump. Triple-A puts the national average of gasoline at $3.08 per gallon. It seems that we're not getting our normal post-Memorial Day dip in prices and that could be because the gasoline demand situation is only getting stronger. The national average for premium is at a very 369 a gallon and diesel fuel is at 321 per gallon. As we predicted as it was apparent that President Biden was going to be elected that America voted for higher gasoline prices and that has proven to be true beyond a shadow of a doubt.

The heat was driving natural gas prices sharply higher results as well as reports of TETCO having one of its pipelines declare a forced measure causing a strong rally. If the heat is on left let up, we're going to see sharply higher natural gas prices later in the summer. Make sure you're prepared with some options as the situation for natural gas looks more bullish by the day.

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