Spring has already sprung in the world of oil and your gas prices are on the rise. The first sign of spring, more often than not, is rising gas prices and by that measure, spring is here. RBOB gas futures are leading the way and retail gas prices have risen for 6 weeks in a row and based on the price of futures, are only getting started.

The rising gas prices are being driven by strong U.S. demand and refinery outages, but also because we are seeing this happen at a time when refineries are deep into maintenance. Gas Buddy told MarketWatch that the average price for regular gas was $2.547 a gallon late Monday afternoon, up 4.8 cents from last week’s average of $2.499 and 21.1 cents higher than last month’s average of $2.336. Refiners are desperately missing those heavy barrels of Venezuelan crude oil.

That oil may be harder to find not only in the U.S. but in India. Reuters is reporting that Venezuela has suspended its oil exports to India and views Russia and China as its main export destinations, the Azeri energy ministry said on Tuesday, citing Venezuela's oil minister. The Azeri ministry issued the statement on Tuesday following talks in Baku between Azerbaijan's energy minister and Venezuelan oil minister and president of state-run oil company PDVSA, Manuel Quevedo. "At the meeting... Quevedo said in order to prevent a sharp reduction, various measures are being implemented and diversification of the export market is underway," the statement said.

Don’t’ look for OPEC to help us out. President Trump may tweet about rising gas prices, but OPEC has already made it clear that they are not raising production. Despite speculation that there is a disagreement between the Saudis and the Russians as to whether to extend cuts again in April, the truth is the cuts will already have done their damage to gas prices this summer.

Still, even with $3.00 a gallon gas in our future, gasoline demand will break records because of the strong economy. On top of that record, oil demand in China will continue and with the EU stimulating their economy oil demand will rise. The Fed, who starts their meeting today, will try to figure out how to unwind its balance sheet but unless they shock us with their statement, their patience will give the bulls an edge.  

Gas and distillate traders need to be hedged. Speculators should have bullish strategies on spreads, swing trades, and position trades. We are moving into squeeze mode.