United States Gasoline Fund LP (ARCA: UGA)

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The fund invests in futures contracts for gasoline, other types of gasoline, crude oil, diesel-heating oil, natural gas and other petroleum-based fuels. The Benchmark Futures Contract is the futures contract on gasoline as traded on the New York Mercantile Exchange that is the near month contract to expire, except when the near month contract is within two weeks of expiration.

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United States Gasoline Fund LP

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골드만삭스, 트럼프 &#39;해방의 날&#39; 관세가 미국 연료 가격을 급등시킬 수 있다고 경고

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올해 상품들은 눈부시게 성과를 올리며 놀랍게도 블룸버그 상품 지수(Bloomberg Commodity Index)가 지난 11월 이후 최고 수준으로 상승했다. 석유, 금, 초콜릿의 가격상승으로 인한 랠리가 대부분의 원동력이었다. 

상품 ETF들이 대부분 급등한 가운데 United States Oil Fund (NYSE:USO) , United States Brent Oil

2024년 높은 성장세를 보이는 5가지 원자재 상품 ETF

With what President Donald Trump is calling "Liberation Day" set for tomorrow, Goldman Sachs is warning that proposed reciprocal tariffs from the Trump administration could significantly inflate U.S. refined product prices, while offering only modest support to <a href="https://www.benzinga.com/markets/commodities">light crude oil prices.</a>
In a research note published Tuesday, Goldman Sachs commodities analyst Callum Bruce outlined two tariff scenarios and their potential effects on U.S. oil markets.
<h3 class="wp-block-heading">Tariffs In Focus: Oil Exemptions Unclear</h3>
Goldman's economists anticipate a 15% reciprocal tariff across U.S. trading partners, though exclusions could reduce the effective rate to around 9 percentage points. 
At present, the firm does not include oil tariffs in its base-case forecasts, but acknowledges the historical precedent of partial exemptions, such as those applied during the Canadian tariff episode.
Still, the lack of clarity on whether crude oil and refined products will be exempt has prompted Goldman to sketch out potential outcomes—ranging from mild market shifts to significant price disruptions.
<h3 class="wp-block-heading">Scenario 1: 10% Universal Tariff On Oil Imports</h3>
In this case, Goldman expects that "heavy crude barrels from Canada and Latin America would largely discount and continue to flow," due to both export constraints on Canadian oil and the fact that U.S. refiners are tailored to process heavier grades.
Yet, refined products would see an immediate price impact. 
Bruce estimates that U.S. benchmark margins for gasoline – as tracked by the United States Gasoline Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UGA#NYSE">UGA</a>) – and diesel in New York Harbor could rise by $6 per barrel, particularly on the coasts, where the lack of domestic refining capacity and limited access to discounted imports amplify price pressure.
On crude prices, the impact would be marginal. "No clear boost to domestic U.S. crude oil prices and U.S. production" is expected, Bruce said, given the mismatch between the light oil the U.S. produces and the heavy crude most U.S. refineries require.
Despite the policy shock, light U.S. crude prices like WTI would see limited gains, as the U.S. produces more light sweet crude than its refineries can efficiently process. This structural mismatch reduces the demand pull on domestic producers, capping any significant upside.
<h3 class="wp-block-heading">Scenario 2: Tariffs Above 10% Drive Global Market Disruptions</h3>
A more aggressive tariff rate could catalyze deeper changes. 
"A larger tariff than 10% on oil U.S. imports may increasingly incentivize heavy oil barrels&#8230;to find new homes outside of the U.S.," the analyst said.
This shift would lead to "significantly higher refined product prices, especially in the U.S.," as the refining system globally becomes constrained by less-than-optimal crude slates.
Goldman estimates a $2-per-barrel widening of light-to-medium crude spreads for each 1 million barrels per day of medium crude replaced by light crude in U.S. refineries. However, most of that adjustment would likely occur via heavy crude discounts, not light sweet premiums.
The firm identifies 1.2 million barrels per day of seaborne heavy crude at risk of redirection, and an additional 1 million barrels per day of Canadian pipeline crude that could be re-exported through the U.S. Gulf Coast—if infrastructure allows.
Despite the looming tariff announcement, Goldman sees little evidence that markets are pricing in oil tariff risks. 
"Current market prices of New York Harbour refined products and Canadian locational crude oil differentials both suggest minimal current risk premia for potential U.S. import tariffs without widespread oil exemptions or oil tariff rate reductions," Bruce said.
Read now: 
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<li><a href="https://www.benzinga.com/25/04/44589523/trumps-liberation-day-tariff-plan-could-ignite-global-trade-shakeup-betting-markets-price-in-the-pain">Trump Tariffs Could Ignite Global Trade Shakeup: Betting Markets Price In Pain</a></li>
</ul>
Photo: Shutterstock

Goldman Warns Trump's 'Liberation Day' Tariffs Could Spike US Fuel Prices

U.S. Energy Secretary Jennifer Granholm announced Tuesday that the Biden administration has ordered the release of approximately 1 million barrels of gasoline from the nation&#8217;s reserves to lower pump prices in<a href="https://www.benzinga.com/topic/gasoline"> the Northeastern United States.</a>
The release will occur in 100,000-barrel increments, aimed at easing fuel costs between Memorial Day and July 4. The gasoline is expected to reach local retailers ahead of the Fourth of July holiday, providing relief to consumers at a critical time.
"The Biden-Harris Administration is laser focused on lowering prices at the pump for American families, especially as drivers hit the road for summer driving season," the Department of Energy wrote in a statement. 
Why It Matters: Gasoline prices typically rise during the summer months due to increased demand as Americans travel more for vacations and other activities. This seasonal surge is a result of higher consumption rates, which naturally drives up prices. Warm weather and school holidays encourage road trips, causing a noticeable uptick in fuel usage across the country. 
Notably, gasoline prices are a crucial component of the Consumer Price Index (CPI) basket and a significant input cost for producers.
As <a href="https://thehill.com/policy/energy-environment/4677411-biden-granholm-1-million-barrels-reserve-gasoline-gas-prices/">The Hill </a>reported, they often become a focal point of political debate, especially in election years. High gasoline prices can impact voter sentiment, leading to political scrutiny. Politicians may face pressure to address fuel costs. 
The release is mandated by a congressional bill passed earlier this year to keep the government operational. This legislation requires the sale of gasoline from the Northeast reserve and the subsequent closure of the reserve, which was established following Superstorm Sandy
Trump Reacts: The move is expected to draw criticism from Republicans, reminiscent of the backlash following the Strategic Petroleum Reserve releases in the summer of 2022, ahead of the midterm elections.
As reported by <a href="https://www.forbes.com/sites/brianbushard/2024/05/21/biden-administration-releasing-1-million-barrels-from-gas-reserves-in-bid-to-lower-prices-which-trump-blasts-as-campaign-stunt/?sh=4188e17c5944">Forbes</a>, former President Donald Trump also criticized the current action, asserting that President Joe Biden is tapping into the reserves &#8220;in a bid to lower prices before the election&#8221; and that gas prices are &#8220;higher than they've been in a long time.&#8221;
Trump further accused Biden of resorting to the reserve &#8220;because he's unable to drill properly,&#8221; speaking to reporters outside the courtroom where his hush money trial is ongoing.
Market Reactions
Gasoline futures are experiencing a 4% decline this week, on track to notch a three-day losing streak after dropping below $2.50 a gallon. Current gasoline prices are approximately 43% lower than their June 2022 peak, when they surpassed $4.00 a gallon.
Chart: Gasoline Prices Are Currently 43% Lower Compared To 2022 Peak
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="495" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/05/22093857/image-94-1024x495.png" alt="" class="wp-image-350149" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/05/22093857/image-94-1024x495.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/05/22093857/image-94-300x145.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/05/22093857/image-94-768x372.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/05/22093857/image-94-1536x743.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/05/22093857/image-94.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
The United States Gasoline Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UGA#NYSE">UGA</a>) saw a 1.2% decrease on Monday, followed by a 1% drop on Tuesday, and continued to fall by another 1% during early trading hours on Wednesday. 
Energy-related stocks, as tracked by the Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>), have underperformed recently, dropping by 0.5% on Tuesday and by 0.6% as of 09:35 a.m. EDT Wednesday.
Among the notable losers in energy stocks on Wednesday were Devon Energy Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DVN#NYSE">DVN</a>), Marathon Oil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MRO#NYSE">MRO</a>), and EQT Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EQT#NYSE">EQT</a>), each experiencing declines of approximately 1.4-1.5%.
Read now: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/05/38944384/3-stocks-to-watch-as-copper-surges-to-record-highs-something-is-cooking-in-china">3 Stocks To Watch As Copper Surges To Record Highs: &#8216;Something Is Cooking In China&#8217;</a>
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Biden Plans To Release 1 Million Barrels Of Gasoline To Curb Northeast Prices: 'Because He's Unable To Drill Properly,' Trump Says

Commodities have been performing remarkably well this year, with the Bloomberg Commodity Index, a widely viewed measure of broad commodities prices, rising to its highest level since November. Most of the rally were driven by higher prices for oil, gold, and cocoa. 
While most commodity ETFs have been soaring, United States Oil Fund (ARCA:USO), United States Brent Oil Fund (ARCA:BNO), Invesco DB Agriculture Fund (ARCA:DBA), United States Gasoline ETF (ARCA:UGA) and GraniteShares Gold Trust (ARCA:BAR) have been the show stealers so far this year. 
Global oil prices have soared to the highest level in seven months, buoyed by the Ukrainian attacks on Russian energy facilities and escalating conflict in the Middle East that has threatened the oil supply. Brent oil rose above $89 per barrel for the first time since early September, while U.S. crude reached a five-month high of $85 per barrel. Brent and U.S. crude prices have risen 15% and 19%, respectively, since the start of the year. Gas prices have also started to climb up ahead of the summer driving season. 
Precious metals like gold and silver took flight in March. The yellow metal logged its biggest monthly rise in more than three years in March, rising 8.5% on renewed expectations of U.S. interest rate cuts in June, strong safe-haven appeal and strong central bank buying. 
Meanwhile, silver prices climbed above the $25-an-ounce mark for the first time in 2024 on higher industrial and manufacturing demand. The global push for green energy, increasing demand in areas like 5G, a rebound in global computer shipments, the photovoltaics and automotive industries, and new sources of demand for sensors used in IoT and OLED lighting are propelling silver demand. 
Industrial metals, such as copper and nickel, are seeing upticks in prices, buoyed by supply concerns and robust demand, driven by increased production of electric vehicles. Notably, copper prices soared to an 11-month high in March following an agreement by China-based smelters to cut production. These smelters are responsible for processing half of the global copper supply. The copper market is tightening, with China smelter maintenance set to peak in April and May, which could hurt refined copper production, thereby hiking the price. 
Coming to agriculture commodities, cocoa prices nearly tripled in the first quarter to reach a level twice as high as the previous record set 50 years ago. The commodity skyrocketed to a new all-time high of more than $10,000 a ton from $3,000 a ton at the start of the year. A third consecutive year of supply shortages caused by poor harvests in West Africa led to the surge. 
We have profiled the ETFs below: 
United States Oil Fund (ARCA:USO) &ndash; Up 21.2% 
United States Oil Fund is the most popular ETF in the oil space, with an AUM of $1.4 billion and an average daily volume of 4 million shares. It seeks an average daily percentage change in USO&#39;s net asset value for any period of 30 successive valuation days within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period. United States Oil Fund has an expense ratio of 0.60%. 
United States Brent Oil Fund (ARCA:BNO) &ndash; Up 19.7% 
United States Brent Oil Fund is designed to track the daily price movements of Brent crude oil. It provides exposure to the near-month futures contract traded on the ICE Futures Exchange. If the near-month futures contract is within two weeks of expiration, the benchmark will be the next-month contract to expire. BNO invests primarily in listed crude oil futures contracts and other oil-related futures contracts, and may invest in forwards and swap contracts. United States Brent Oil Fund amassed $134.2 million in its asset base, and charges 1.00% as annual fees and expenses. Volume is good as it exchanges 600,000 shares a day on average. 
Invesco DB Agriculture Fund (ARCA:DBA) &ndash; Up 19.4% 
Invesco DB Agriculture Fund tracks the DBIQ Diversified Agriculture Index Excess Return, a rules-based index composed of futures contracts on some of the most liquid and widely traded agricultural commodities. It has key holdings in cocoa, coffee and live cattle, with double-digit exposure each. Invesco DB Agriculture Fund charges 93 bps on an annual basis and trades in a volume of 406,000 shares a day. It has amassed $788.6 million in its asset base. 
United States Gasoline ETF (ARCA:UGA) &ndash; Up 18.9% 
United States Gasoline ETF is designed to track the movements of gasoline prices in percentage terms. The benchmark futures contract is the contract on gasoline as traded on the NYMEX. If the near-month contract is within two weeks of expiration, the benchmark will be the next-month contract to expire. United States Gasoline ETF is illiquid, with a daily trading volume of about 28,000, suggesting that investors have to pay extra beyond the annual fee of 0.97% per year. The fund has managed assets of $120.3 million. 
GraniteShares Gold Trust (ARCA:BAR) &ndash; Up 10.4% 
GraniteShares Gold Trust is designed to seek the performance of the price of gold. It provides an investment similar to an investment in gold through a Trust without having to open a metal account. It is among the lowest-cost gold ETFs on the market, having an expense ratio of 0.17%. GraniteShares Gold Trust has amassed $1 billion in its asset base while trading in an average daily volume of 663,000 shares.
<a href="https://www.zacks.com/stock/news/2249980/5-commodity-etfs-riding-high-in-2024?cid=CS-BENZ-FT-etf_news_and_commentary-2249980">To read this article on Zacks.com click here.</a>

5 Commodity ETFs Riding High in 2024

Gas prices at the pump are on the rise and could lead to a higher national average next month, exacerbating inflation concerns and lowering the prospect of <a href="https://www.benzinga.com/federal-reserve">interest rate cuts during the first half of 2024</a>.
According to the American Automobile Association&#8217;s Gas Prices <a href="https://gasprices.aaa.com/">Monitor</a>, the national average price of a gallon of regular gas hit $3.49 on Tuesday.
Some states, particularly the higher taxed regions on the West Coast are already paying upwards of $4 a gallon, with California&#8217;s average hitting $4.92, Hawaii at $4.70, Washington at $4.33 and Nevada $4.22.
Those paying the lowest are the states closest to domestic refining facilities around the Mexican Gulf and up through the Midwest. 
<h2 class="wp-block-heading">Wholesale Price Leaps As Ukraine Strikes Russia Refineries</h2>
Much of the recent moves higher at the pump are due to higher wholesale gasoline prices on commodity exchanges. On Tuesday, RBOB Gasoline futures were down a shade after hitting their highest levels since August on Monday. 
The United States Gasoline Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UGA#NYSE">UGA</a>) an exchange traded fund that tracks the price of wholesale gas futures, gained 1.7% to $71.58 on Monday, hitting its highest level since September.
Also Read: <a href="https://www.benzinga.com/news/24/03/37811556/saudi-aramco-ceo-amin-nasser-says-abandon-the-fantasy-of-phasing-out-oil-and-gas">Saudi Aramco CEO Amin Nasser Says &#8216;Abandon The Fantasy Of Phasing Out Oil And Gas&#8217;</a>
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/19081012/newplot-2024-03-19T120942.286.png" alt="" class="wp-image-257159" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/19081012/newplot-2024-03-19T120942.286.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/19081012/newplot-2024-03-19T120942.286-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
The surge in gasoline prices in the past couple of weeks has mainly been down to continued drone attacks by Ukraine on Russian refineries. Commodity trader Gunvor believes as much as 600,000 barrels worth of daily output capacity has been halted by these attacks.
JPMorgan analysts, meanwhile, reckon that number is closer to 900,000 barrels per day.
Patrick De Haan, analyst at Gas Buddy, said: &#8220;Russia has total refining capacity of around 5.5 million barrels per day, so at best 10% of their refining is offline, but by some estimates, it may be closer to 15%.&#8221;
Sanctions on Russia have halted oil and petroleum exports, leading to a squeeze in gasoline stocks for both its domestic needs and for countries bypassing Western sanctions. This situation is expected to increase reliance on OPEC&#8217;s production, potentially driving up global distillate prices.
&#8220;Drone attacks on Russia refineries adds to global supply risks,&#8221; <a href="https://twitter.com/search?q=%23OOTT&amp;src=hashtag_click">said</a> commodity analyst Giovanni Staunovo on X.
Among the most significant attacks so far has been the March 12 strike on the Lukoil refinery at Nizhny Novgorod, which halved diesel production and cut gasoline output by around a quarter. 
A March 13 attack on Rosneft&#8217;s Ryazan refinery knocked out a third of its gasoline and more than half its diesel production. And a March 16 strike on the Syzran refinery halted production completely.
<h2 class="wp-block-heading">Crude Trading Above $80 A Barrel</h2>
In the broader oil market, crude prices remained close to four-month highs, with Nymex WTI U.S. crude futures standing firm at $82.13 a barrel. The United States Oil Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) held at October highs at around $78.
Implications in the U.S. of rising car fuel prices extend far beyond the commodity market, to the Federal Reserve and the White House.
The Fed meets this week for its March Open Market Committee. At the end of 2023, this was broadly expected to be the meeting at which the central bank kicked off its rate cutting cycle. Now, the earliest economists anticipate any changes is May, with most projecting adjustments in either June or July.
Last week&#8217;s consumer inflation data showed that the energy index combined with the shelter index contributed to nearly two-thirds of the total rise in inflation in February.
Meanwhile, oil companies are benefiting from the renewed strength in oil prices. Exxon Mobil Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) is up 7.5% in March, while Chevron Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>) is up 2.2% on the month.
The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>), which tracks U.S. oil companies, including the above, is up 5.8% in March. 
Now Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37804727/oil-prices-jump-to-four-month-high-surpass-200-day-average-momentum-indicators-rema">Oil Prices Jump To Four-Month High, Surpass 200-Day Average: &#8216;Momentum Indicators Remain Bullish</a>&#8216;
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Gas Prices Set For Summer Spike: West Coast Consumers Already Paying More Than $4 A Gallon

Ukraine drone attacks are increasingly targeting Russian infrastructure, and at the top of the list are oil and refining installations. Could this have a knock-on impact on <a href="https://www.benzinga.com/markets/commodities">gasoline prices in the U.S.</a>?
 In the last two days, two Russian fuel depots have been damaged — one critically — in separate Ukrainian drone and rocket attacks.
Industry sources, reported by Reuters, said the attacks left the crude distillation plant at Norsi so damaged that around half of the refinery&#8217;s output has been cut.
That&#8217;s significant, as the refinery is capable of producing 340,000 barrels of gasoline a day. That equates to 11% of Russia&#8217;s gasoline.
Also Read: <a href="https://www.benzinga.com/markets/equities/24/03/37658256/geopolitical-unrest-halts-bp-adnocs-2b-bid-for-israeli-gas-firm">Geopolitical Unrest Halts BP, Adnoc&#8217;s $2B Bid For Israeli Gas Firm</a>
<h2 class="wp-block-heading">Russia Bans Gasoline Exports</h2>
The Kremlin already banned exports of gasoline starting on March 1, it said, to help lower high domestic prices and to coincide with spring maintenance and summer holidays.
Warren Patterson, head of commodity strategy at ING, said: &#8220;The announcement is not expected to have a large impact on the global gasoline market as Russia consumes most of the gasoline it produces.&#8221;
But, David Sheppard at the Financial Times <a href="https://twitter.com/OilSheppard/status/1767824383517634852">posted</a> on X on Wednesday: &#8220;Ukraine going after Russian oil refineries potentially reflects some understandable frustration with the West's soft-pedal approach to crimping Moscow's energy revenues. 
&#8220;But if Russian refined fuel exports fall substantially, the impact on pump prices may become a headache for Joe Biden.&#8221;
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/13100833/newplot-2024-03-13T140818.915.png" alt="" class="wp-image-250180" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/13100833/newplot-2024-03-13T140818.915.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/13100833/newplot-2024-03-13T140818.915-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
He added that if Ukraine were to continue its attacks on Russian refineries and, depending on how successful the strategy, &#8220;take out enough gasoline capacity — at some point Russia would need to start importing.&#8221;
And if Russia needs to start importing, so would the countries it still supplies.
This could put pressure on OPEC+&#8217;s demand forecasts. The cartel expects increases of 2.25 million barrels a day in 2024 and a further 1.85 million a day in 2025, suggesting a potential surge in oil demand.
<h2 class="wp-block-heading">Market Reaction</h2>
After easing over the last week or so, crude oil prices were up on Wednesday following news of the Ukraine refinery strikes. Nymex West Texas Intermediate climbed 2.2% to $79.24 a barrel.
The United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), an exchange traded fund that tracks U.S. oil prices, was up 1.8% at $73.33.
Meanwhile, U.S. wholesale gasoline prices were also higher, with RBOB futures climbing 2% to $2.6355 a gallon. The United States Gasoline Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UGA#NYSE">UGA</a>) was 1.9% higher at $67.28.
Gas prices at the pump have remained relatively flat in recent weeks, averaging around $3.40 a gallon. 
Patrick De Haan, analyst at Gas Buddy, said it won&#8217;t last. 
&#8220;Most areas are nearing the finish line on the changeover to lower RVP summer-spec fuels, which will start flowing to retail in the weeks ahead, and with it, higher cost,&#8221; De Haan said. 
Now Read: <a href="https://www.benzinga.com/government/24/03/37632374/fears-of-middle-east-escalation-as-israel-and-hezbollah-clashes-intensify">Fears Of Middle East Escalation As Israel And Hezbollah Clashes Intensify</a>
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Ukraine Drones Target Russian Oil Installations: Why US Gasoline Prices Are At Risk

Three people were reportedly killed and several others injured after an anti-ship ballistic missile launched by Iran-backed Houthi rebels in Yemen struck bulk carrier M/V True Confidence in the Gulf of Aden <a href="https://www.benzinga.com/news/global">late on Wednesday</a>.
The crew abandoned the Barbados-flagged, Liberia-owned vessel following the attack, which caused significant damage. At least three of the injured were reported to be in critical condition.
U.S. Central Command said on X that coalition warships were responding and &#8220;are addressing the situation.&#8221;
It added: &#8220;This is the fifth ASBM fired by Houthis in the last two days. Two of these ASBMs impacted two shipping vessels — M/V MSC Sky II and M/V True Confidence — and one ASBM was shot down by USS Carney. 
&#8220;These reckless attacks by the Houthis have disrupted global trade and taken the lives of international seafarers.&#8221;
While the attacks have driven many freight carriers to avoid the Red Sea/Suez Canal/Mediterranean route to Europe and the U.S. east coast, some persist, as the alternative Cape of Africa route is longer and can add up to two weeks to a journey.
&#8220;This situation has led to an immediate contraction in market capacity and a surge in shipping rates, with significant impacts on global trade networks and economic stability,&#8221; said Zera Zheng, global head of business resilience consulting at Norwegian shipping giant Maersk, which has been avoiding the Red Sea since mid-December.
<h3 class="wp-block-heading">Oil Prices Creep Higher This Year</h3>
Oil prices haven&#8217;t responded violently, but the longer the war in Gaza continues to provoke antipathy towards Israel from the Middle East, oil prices have slowly risen back to four-month highs.
The United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), an exchange-traded fund that tracks U.S. oil prices, rose 1.2% to $74.34 on Wednesday but was down 0.6% in pre-market trade on Thursday. So far in 2024 it has risen 11.5%.
Also Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37455561/natural-gas-soars-after-top-us-producer-slashes-output-oil-prices-dip-as-opec-exten">Natural Gas Soars After Top US Producer Slashes Output; Oil Prices Dip As OPEC+ Extends Production Curbs</a>
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/07091148/newplot-2024-03-07T131130.512.png" alt="" class="wp-image-243144" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/07091148/newplot-2024-03-07T131130.512.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/07091148/newplot-2024-03-07T131130.512-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Gasoline prices are also rising, underpinned by the rise in crude. After falling to a three-year low in December, RBOB Gasoline futures are up 28.7% to their highest levels since October 2023.
The United States Gasoline Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UGA#NYSE">UGA</a>) is up 16% over the same period. The U.S. average gas price at the pump has risen from $3.06 at the beginning of the year, to $3.40 on Wednesday, according to Gas Buddy.
Meanwhile, U.S. natural gas prices remain more than 5% over the week after EQT Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EQT#NYSE">EQT</a>), the largest producer announced on Monday it was slashing output due to low prices. The United States Natural Gas Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UNG#NYSE">UNG</a>) showed a weekly gain of 5.5%.
<h3 class="wp-block-heading">Cease-Fire Talks Deadlocked</h3>
Back in the Gaza Strip, desperate civilians hoping for some relief from the shelling and fighting during the holy month of Ramadan, looked set to be disappointed, with cease-fire talks seemingly deadlocked. 
The deal to release Israeli hostages held in Gaza by Hamas in exchange for a cessation in hostilities appeared to be at an impasse after Israel refused to send delegates to Cairo to join talks with Hamas and diplomats from Egypt, Qatar and the U.S.
Israel had previously said it would not join the Cairo talks without first being provided a list of the names of hostages — alive and dead — still being held by Hamas.
Fears are now growing that without a cease-fire by Ramadan, tensions could erupt across the Islamic Middle East. President Joe Biden said earlier this week that without a cease-fire by the start of the holy month, the region could become &#8220;very dangerous.&#8221;
Now Read: <a href="https://www.benzinga.com/news/24/03/37456347/kamala-harris-calls-for-immediate-ceasefire-in-gaza-asks-israel-to-ramp-up-aid-deliveries-our-common">Kamala Harris Calls For Immediate Ceasefire In Gaza, Asks Israel To Ramp Up Aid Deliveries: &#8216;Our Common Humanity Compels Us To Act&#8217;</a>
Image: Shutterstock.

3 Killed In Houthi Missile Attack, Oil Prices Dip From 4-Month Highs, Gaza Cease-Fire Talks Stall

Gasoline prices at the pump are on the rise again, after falling to a two-and-a-half-year <a href="https://www.benzinga.com/topic/gas-prices">low in early January</a>.
On Wednesday, the national average price rose to $3.30 a gallon, up 2.2 cents from a week ago, and up 25 cents from $3.05 hit on January 11, which was the lowest since June 2021.
Underlying crude oil prices have been rising in recent weeks with Nymex WTI crude futures up 10% since the start of the year as rising tensions in the Middle East and attacks on oil shipments in the Red Sea have raised concerns over supply.
On Wednesday, WTI was up fractionally at $78.90 a barrel, while the United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), an exchange-traded fund that tracks a basket of oil prices, was standing close to a three-month high at $73.84.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/28102612/newplot-2024-02-28T142556.047.png" alt="" class="wp-image-232553" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/28102612/newplot-2024-02-28T142556.047.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/28102612/newplot-2024-02-28T142556.047-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Also Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/02/37337380/what-if-the-fed-does-not-cut-rates-this-year-inflations-stickiest-mile-to-2-target">What If The Fed Does Not Cut Rates This Year? Inflation&#8217;s Stickiest Mile To 2% Target</a>
<h2 class="wp-block-heading">Wholesale Gasoline Price Jump</h2>
Wholesale gasoline prices have risen more dramatically as gasoline stockpiles, <a href="https://www.eia.gov/petroleum/weekly/gasoline.php">reported</a> by the Energy Information Administration, have fallen over the past four weeks.
Since the beginning of the year the RBOB Gasoline futures price is up 22% at $2.575 a gallon. The United States Gasoline Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UGA#NYSE">UGA</a>) is up 10% in 2024, but was trading 0.9% lower on Wednesday.
Patrick De Haan, analyst at Gas Buddy, <a href="https://twitter.com/GasBuddyGuy/status/1762828762658267316">said</a> on X: &#8220;The national average has risen to $3.30/gal this morning, up 2.2 cents from last week and will likely continue to climb. By later today, we could see the national average back to a YoY increase.&#8221;
Currently, he said, the national average price remained just 1.5 cents below a year ago.
Adding to concerns, a storm system in the Midwest that has produced several tornados in the region was reported by De Haan to be nearing three major refineries — Exonn Mobil Corp&#8216;s (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) Joliet, Citgo&#8216;s Lemont and BP Plc&#8216;s (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BP#NYSE">BP</a>) Whiting facilities.
As yet, no disruptions have been reported.
<h2 class="wp-block-heading">Inflation Pressure</h2>
Rising fuel prices could add to speculation that inflation may remain stickier than expected in the coming months, further adding to the possibility that the Federal Reserve&#8217;s highly-anticipated first-rate cut will be delayed beyond its May or June policy meetings.
While several rate cuts are priced in by the market for this year, persistent and continued attacks in the Red Sea and any escalation of tensions in the Middle East could push oil and gasoline prices higher, which would have an impact on headline consumer price inflation.
"The market might be wrong, as much as it was wrong in completely underestimating inflation and overestimating the slowdown of the economy. And to be fair, the Fed, by delaying the tightening cycle by one year, was in the same camp," said Claudio Irigoyen, rates analyst at Bank of America.
Now Read: <a href="https://www.benzinga.com/markets/equities/24/02/37344387/warren-buffett-ignores-buy-and-hold-strategy-with-this-home-builder-are-other-stocks-at-risk">Buffett Ignores Buy-And-Hold Advice With This Home Builder Stock</a>
Image: Shutterstock

Gasoline Pump Prices Near 1-Year High: Is This An Inflationary Threat?

Oil prices rose on Tuesday pushing up average gasoline prices at the pump on concerns supply could be disrupted as Iran tested a ballistic missile in the Gulf of Oman, while demand hopes were led by OPEC raising its economic forecasts.
Nymex WTI, the U.S. benchmark crude oil futures contract, was up 1.8% in afternoon trading at $78.27 a barrel — its seventh-consecutive daily gain. Closing in on the $80-a-barrel mark would take it to its highest level since November.
Brent crude, the European benchmark, was up 1.2% at $82.97 a barrel, while the United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) an exchange-traded fund (ETF) that tracks the price of light-sweet crude, climbed 1% to $72.80.
<h2 class="wp-block-heading">Iran Launches Missiles</h2>
Iran said on Tuesday that it had launched long-range ballistic missiles from one of its warships in the Gulf of Oman for the first time, firing two projectiles capable of striking targets within a range of 1,700 kilometers, or 1,050 miles.
The missile, according to the Iranian Islamic Revolutionary Guard Corps. (IRGC), traveled 750km, before hitting a target in the Iranian desert.
The IRGC said in a statement: &#8220;Through this new achievement, our range of influence and naval power have increased to any point required.&#8221;
The missile test raised concerns that Iran could, if drawn into a wider Middle East conflict, begin targeting shipping in the Gulf of Oman as it exits the oil producing areas in the Persian Gulf. Or, if it targets Israel, the escalation could impact oil production in the region.
Also Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/02/37094859/magnificent-7-is-the-most-crowded-trade-among-institutional-investors-with-two-thir">Magnificent 7 Is &#8216;The Most Crowded Trade&#8217; Among Institutional Investors</a>
<h2 class="wp-block-heading">Rising Gas Prices</h2>
Paris-based International Energy Agency said on Tuesday, however, that downward pressure on prices would resume this year in the absence of major geopolitical escalation.
IEA executive director Fatih Birol said: &#8220;Oil supply increases from the Americas will be more than enough to meet demand growth this year, putting downward pressure on oil prices this year.&#8221;
Meanwhile, the price of gasoline at U.S. pumps is up slightly due to high demand and tighter supply. Patrick De Haan at Gas Buddy said on Tuesday that the national average price per gallon was up to $3.23, the highest it&#8217;s been since early December. 
Prices of wholesale gasoline have continued to rise over the past couple of weeks, with RBOB futures now up to $2.4045 a gallon — its highest level since late September.
And the United States Gasoline Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UGA#NYSE">UGA</a>), which tracks the price of RBOB wholesale gasoline, 1.6% at $68.71 — also a high since September.
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Warren Patterson, commodities strategist at ING said prices &#8220;were likely to remain supported in the short term as refineries go into maintenance season.&#8221;
<h2 class="wp-block-heading">OPEC Raises Economic Forecast</h2>
OPEC, the oil cartel, released its latest monthly oil report on Tuesday, and while it didn&#8217;t change its demand forecasts, it raised its economic forecast amid easing inflation and expected cuts in interest rates.
Its outlook, on the whole, was balanced: &#8220;Robust economic activity in China, global air travel recovery and expected healthy petrochemical feedstock requirements will be key for oil demand growth in 2024."
It added, however: &#8220;Inflation levels, monetary tightening measures and sovereign debt levels could weigh on global oil demand prospects in the current year.&#8221; 
Read Now: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/02/37101164/could-empty-office-space-spark-systemic-credit-event-at-regional-banks">Could Empty Office Space Spark &#8216;Systemic Credit Event&#8217; At Regional Banks?</a>

Oil Prices Up As Iran Tests Ballistic Missiles, OPEC Raises Economic Forecasts

U.S. motorists&#8217; hopes that the price of gasoline will fall below $3 a gallon in time for the Christmas holidays could be realized in the next few days if benchmark <a href="https://www.benzinga.com/news/23/12/36112158/oil-enters-bear-market-as-crude-prices-slump-to-five-month-low">oil prices keep falling on commodity markets</a>.
Patrick De Haan, oil market analyst and Twitter&#8217;s @GasBuddyGuy, said Friday the national average pump price had fallen to $3.17 a gallon and was still moving lower.
Oil prices and wholesale gasoline prices were higher on Friday, however. The United States Gasoline Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UGA#NYSE">UGA</a>), as an exchange-traded fund that tracks gas prices, was up 2% at $59.30.
The last time the average pump price was below $3 was in May 2021 — but back then it was on its way higher, following several years at less than $3. At its lowest in April 2020, during a massive drop in demand during the Covid pandemic, motorists were paying an average of just $1.84.
Also Read: <a href="https://www.benzinga.com/markets/equities/23/12/36138172/solar-energy-broke-records-in-2023-why-are-shares-tumbling">Solar Energy Broke Records In 2023, Why Are Shares Tumbling?</a>
<h2 class="wp-block-heading">Oil Market Shocks</h2>
You only have to look at the underlying commodity market to see why it was so cheap back then: in mid-April 2020, Nymex West Texas Intermediate, the U.S. benchmark oil futures price, was already trading at historic lows between $15-$20 a barrel — then on April 20, it suddenly dived into negative territory — essentially meaning oil producers should be paying to have their oil taken off them.
But that&#8217;s the nature of oil markets. They are prone to shocks — and we&#8217;ve seen a few. Particularly in the 1970s and 80s during strife in the Middle East that sent prices soaring. Unfortunately — for the motorist — upside shocks are more common than ones that drive prices lower.
But here&#8217;s a sign that everyone in the U.S. should welcome. Wholesale gasoline prices have just fallen below $2 a gallon.
De Haan Tweets: &#8220;NYMEX RBOB (the benchmark for the future of #gasprices) has just fallen below $2/gal for the first time since 2021. GOOD NEWS: this signals a strong possibility that the national average will fall to $2.99 by Christmas if it can remain at/below that level.&#8221;
<h2 class="wp-block-heading">Consumers Are Happy, But Europeans Aren&#8217;t</h2>
Falling gas prices keep the consumer happy, too. The price of petroleum at the pump is as good a measure of inflation as most consumers need. Indeed, Friday&#8217;s <a href="https://www.benzinga.com/etfs/broad-u-s-equity-etfs/23/12/36154833/us-consumer-sentiment-sharply-rebounds-in-december-up-16-1-year-over-year-inflation-ex">Michigan Consumer Confidence</a> survey for December showed sentiment rising to its highest level since August.
&#8220;Everything is just gas prices,&#8221; said Michael Antonelli, market strategist at Baird.
But spare a thought for the Europeans — of which this reporter is one. Here in the UK we&#8217;re paying an average of around £5.64 a gallon — that&#8217;s $7.07.
And look at this over in France, Tweeted by our @GasBuddyGuy:
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
<div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true"><a href="https://twitter.com/hashtag/GasPrices?src=hash&amp;ref_src=twsrc%5Etfw">#GasPrices</a> in NE France: Super 95 (90-91 AKI): €1.829/L or $7.44/gal Super 98 (93 AKI): €1.899/L or $7.73/gal Diesel: €1.829/L or $7.44/gal Prem Diesel: €1.889/L or $7.68/gal <a href="https://t.co/6bhr6HMdkv">pic.twitter.com/6bhr6HMdkv</a>
&mdash; Patrick De Haan &#x26fd;&#xFE0F;&#x1f4ca; (@GasBuddyGuy) <a href="https://twitter.com/GasBuddyGuy/status/1733137191528763725?ref_src=twsrc%5Etfw">December 8, 2023</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</figure>
Also Read: <a href="https://www.benzinga.com/news/23/12/36112158/oil-enters-bear-market-as-crude-prices-slump-to-five-month-low">Oil Enters Bear Market As Crude Prices Slump To Five-Month Low</a>

Gas Poised To Fall Below $3 A Gallon: But Spare A Thought For The Heavily-Priced Europeans

Memorial Day, which signals the start of the <a href="https://www.benzinga.com/topic/summer-driving-season">summer driving season, </a>is upon us and cash-strapped consumers have an eye on pump prices as they navigate through a tough economic climate.
Fortunately, for their relief, gas prices are trading off the levels seen a year ago.
What Happened: The nationwide average price of regular gasoline was $3.578 a gallon, according to data provided by the American Automobile Association. This, however, marked an increase from the week-ago average of $3.539.
A year ago, prices topped $4.600, when higher inflation and the Ukraine-Russia war sent gas prices skyrocketing.
<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="694" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/05/29033333/Weekly-Gas-Prices-EIA-1024x694.png" alt="" class="wp-image-44444" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/05/29033333/Weekly-Gas-Prices-EIA-1024x694.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/05/29033333/Weekly-Gas-Prices-EIA-300x203.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/05/29033333/Weekly-Gas-Prices-EIA-768x520.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/05/29033333/Weekly-Gas-Prices-EIA.png 1240w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Despite the easing from a year ago, gas prices are still above the levels seen before 2022.
In line with the typical trend, prices were the highest in the states on the West Coast. Consumers in the Southeastern region enjoyed the cheapest prices.
<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="860" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/05/29033347/State-Gas-Prices-AAA-1024x860.png" alt="" class="wp-image-44445" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/05/29033347/State-Gas-Prices-AAA-1024x860.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/05/29033347/State-Gas-Prices-AAA-300x252.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/05/29033347/State-Gas-Prices-AAA-768x645.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/05/29033347/State-Gas-Prices-AAA.png 1240w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
See Also:<a href="https://www.benzinga.com/money/best-commodity-etfs"> Best Commodity ETFs Right Now</a>
Demand during the long weekend is expected to increase. AAA forecasts that Memorial Day trips are set to increase 6% year-over-year in 2023. It expects more than 37 million Americans to drive to their destination.
AAA sees the slight week-over-week uptick in gas prices to be mitigated by the low cost of crude oil. A barrel of WTI-grade crude oil ended Friday's session at $72.67.
"Pump prices could stabilize or fall once this long weekend is in the rearview mirror," said Andrew Gross, a spokesperson for AAA.
Why It's Important: Any gas price inflation could act as a setback as the economy grapples with multiple headwinds. The <a href="https://www.benzinga.com/23/05/32501319/feds-kashkari-open-to-idea-of-moving-slow-on-rates-but-does-not-support-pivot">Federal Reserve has shown no signs of pivoting</a> even after raising the Fed funds rates to a 16-year high of 5-5.25%.
The central bank is held back by inflation that is stubbornly holding above its target.
The banking crisis has added another element of risk to the economy. Predictions are for the economy to at least dip its toe into a mild recession. On a positive note, sanity prevailed as after prolonged deliberations the White House and House Republicans agreed on a budget deal. If the bill is ratified by Congress and signed into law by President Joe Biden, we may have averted a precipitous economic collapse.
Against this backdrop, higher gas prices may prove unhealthy for consumer spending, which fuels the bulk of economic activity.
All eyes would be on gas prices in the near term to see if there is any pain in the pump that can slow down growth further.
The United States Gasoline Fund, LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UGA#NYSE">UGA</a>) ended Friday&#8217;s session 1.46% higher at $61.35 a barrel, according to <a href="https://benzinga.grsm.io/lxquj26b2sag">Benzinga Pro data.</a>
Read Next: <a href="https://www.benzinga.com/news/23/04/31941906/gas-prices-possibly-peaked-short-term-long-term-pump-prices-could-rise-as-us-shifts-to-evs">Gas Prices Possibly Peaked Short-Term; Long-Term Pump Prices Could Rise As US Shifts To EVs</a>

Media

Gas Prices Stay Calm Over Memorial Day Weekend, But AAA Warns Of Uncertain Future

Skyrocketing oil and gasoline prices have some Americans calling for a return to the pricing controls of the 1970s.
Joseph Brusuelas, principal and chief economist for RSM US LLP, discussed price controls in a new <a href="https://realeconomy.rsmus.com/the-illusion-of-inventory-and-price-controls-in-the-current-energy-market/">blog post</a> this week and outlined exactly why they are a bad idea.
What Are Price Controls? Price controls are government actions taken to manipulate free market prices. While many people may think of price controls as a rigid policy such as rent-controlled housing with a hard cap on rent, Brusuelas said price control policies actually fall on a spectrum ranging from mild to severe.
Related Link: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/22/03/26152205/why-inflation-during-times-of-war-is-typical-and-could-get-even-worse">Why Inflation During Times Of War Is Typical And Could Get Even Worse</a> 
Brusuelas said the mild end of the price control spectrum would be the actions taken by the Federal Reserve, including interest rate changes and quantitative easing and tightening.
The severe end of the price control spectrum includes the actions taken by the U.S. Office of Price Administration during World War II. The OPA set prices and imposed rationing for a wide range of products to support the war effort, including gasoline, rubber, sugar and coffee. Another example of extreme price controls came in the 1970s when Americans in certain areas were only allowed to purchase gasoline on certain days of the week. President Richard Nixon enacted wage controls in 1970s to help combat inflation.
Failed Experiment? Brusuelas said the price controls of the 1970s &quot;spectacularly failed.&quot;
&quot;Those price controls didn&rsquo;t work &mdash; the price of gasoline continued to rise, and price controls and stringent rules for purchases resulted in inefficiencies,&quot; he said.
The&nbsp;United States Gasoline Fund LP (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/uga#NYSE">UGA</a>) is up a whopping 86.6% in the last year.&nbsp;
While it may seem like gasoline is a necessity that consumers can&#39;t do without, Brusuelas said history demonstrates consumers and the market have more flexibility than it may seem. In addition to driving fewer miles, the 1970s oil shock brought about a new wave of compact cars and energy-efficient vehicles. Today&#39;s environment could increase&nbsp;demand for electric vehicles or other clean energy transportation services.
Brusuelas said price controls certainly serve a purpose during wartime, when a nation&#39;s survival may depend on whether or not its military has access to the resources it needs. But higher prices alone aren&#39;t enough to justify price controls.
&quot;Prices in an open economy are the most efficient mechanism for determining consumer choice,&quot; Brusuelas said.
The environment in 2022 isn&#39;t a result of a failed free market, the economist said. It is simply the fallout from a climate of geopolitical uncertainty and the inability for the world to move beyond a single primary energy source.
&quot;Rather than attempting to manipulate the supply or demand for oil, governments might find it more efficient to advance the transition from fossil fuels and to subsidize those who cannot afford to quickly make that transition,&quot; Brusuelas concluded.
Benzinga&#39;s Take: In March, U.S. President Joe Biden joined 30 other countries in committing to releasing 60 million barrels of oil from strategic oil reserves, which in itself was a form of price controls. If energy prices remain elevated, the free market will eventually adjust in some way, whether that adjustment is drivers buying less gasoline, the transportation industry providing more green products and solutions or an economic recession that drives down industrial oil demand.
A line of cars waiting for fuel in June 1979. Photo by <a href="https://commons.wikimedia.org/wiki/File:1979_Gasoline_lines.jpg">Warren K. Leffler via The Library of Congress</a>.&nbsp;

Education

Why Price Controls Are Not The Answer To Soaring Gasoline Prices

Tymur Khakimov/Pexels
The Impact Of War And Sanctions
In a post earlier this month (Sanctioning Ourselves), I mentioned how our system&#39;s top names reflected the impact of Russia&#39;s invasion of Ukraine and the subsequent U.S.-led sanctions on Russia:
<blockquote>As regular readers know, our system doesn&#39;t consider the macro picture when selecting its top names. Instead, it gauges stock and options market sentiment to estimate which securities are likely to perform the best over the next six months. Nevertheless, that bottoms-up approach is painting a clear macro picture when you look at our most recent top ten.
<img alt="" src="https://static.seekingalpha.com/uploads/2022/3/12/131469-1647145786386311.png" />
Screen capture via&nbsp;<a href="https://portfolioarmor.com/" rel="dofollow">Portfolio Armor</a>&nbsp;on 3/11/2022..
Our number one name on Friday was the Teucrium Wheat Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/weat#NYSE">WEAT</a>), and two other agricultural names made the list: the Teucrium Corn Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/corn#NYSE">CORN</a>) and nitrogen fertilizer producer CF Industries Holdings, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cf#NYSE">CF</a>). Fully half of our top ten were oil and gas names including Haliburton Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hal#NYSE">HAL</a>), Occidental Petroleum Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/oxy#NYSE">OXY</a>), and the United States Gasoline Fund LP (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/uga#NYSE">UGA</a>). Overall, our nine of our top ten names are bets on food and energy getting more expensive over the next six months.
</blockquote>
Wheat Fund Spikes On Monday
Shares of the Teucrium Wheat Fund spiked 6.41% on Monday, and it was again the top name in our system on Monday night. The reason for the spike may have been&nbsp;an article over the weekend by the New York Times&#39;s Brazil bureau chief, Jack Nicas, arguing that the war in Ukraine might cause a global food crisis. Nicas summarized the key points of his article in the Twitter thread below.&nbsp;
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In Case The Wheat Fund Pulls Back
Ideally, negotiations between Russia and Ukraine lead to peace soon. If so, it&#39;s possible that the dynamic driving wheat prices higher could reverse, causing shares of WEAT to drop. Here&#39;s a way you can hold WEAT now, while limiting your downside risk in the event that happens.
As of Monday&#39;s close, this was the optimal collar to hedge 1,000 shares of WEAT against a greater-than-20% drop by late October, while not capping your possible upside at less than 41% by then.&nbsp;
<img alt="" src="https://static.seekingalpha.com/uploads/2022/3/22/131469-1647934872042087.jpg" />
<img alt="" src="https://static.seekingalpha.com/uploads/2022/3/22/131469-16479348841970704.jpg" />
Screen captures via the&nbsp;Portfolio Armor&nbsp;iPhone app.&nbsp;
Since the income generated from selling the call leg was equal to the cost of buying the put leg, the net cost of this collar was negative. To be conservative that cost was calculated assuming you bought the puts at the ask and sold the calls at the bid (the worst end of the spread in each case). Since, in practice, you can often buy and sell options at some price between the bid and ask, you likely would have received a net credit when opening this hedge on Monday.&nbsp;
In either case, your maximum upside would have been slightly more than twice your maximum drawdown.&nbsp;

CORN

WEAT

Why The Wheat ETF Spiked On Monday: A New Report Into How Russia's Invasion Of Ukraine, And The Resulting Sanctions, Could Lead To A Global Food Crisis.

An Economic World War III
President Biden deserves credit for having so far avoided World War III. He has resisted calls to impose a no-fly zone over&nbsp;Ukraine, which would lead to war with Russia, and he has clearly signaled he has no intention of fighting Russia.&nbsp;
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But Biden has, in effect, helped launch an economic World War III, imposing unprecedented sanctions on a large and economically important country. Russia isn&#39;t an Iran or Libya. It&#39;s a continent-spanning country with a population of 145 million, and it is (or was)&nbsp;one of the world&#39;s top five exporters of oil, natural gas, nickel, wheat, coal, and other commodities. Let&#39;s breakdown why these sanctions are dangerous for us, and close with our investment approach to them.&nbsp;
What&#39;s The Endgame?
One of the biggest problems with the sanctions is that there&#39;s been no endgame articulated for them, and without an endgame, they may never end.&nbsp;The United States has had sanctions on Cuba&nbsp;since 1962.&nbsp;Obviously, the most recent, and most severe sanctions the West imposed on Russia were in response to Russia&#39;s invasion of Ukraine, but will the new sanctions be lifted if Russia withdraws its invasion force, or signs a peace treaty with the government of the Ukraine? Or will we demand Russia abandon Crimea (circled below), which is majority Russian ethnically, historically Russian, and includes Sevastopol, the home port of Russia&#39;s Black Sea Fleet?&nbsp;
<a href="https://static.seekingalpha.com/uploads/2022/3/12/131469-1647143458037731_origin.png" rel="lightbox"><img alt="" src="https://static.seekingalpha.com/uploads/2022/3/12/131469-1647143458037731.png" style="height:447px; width:640px" /></a>
&nbsp;
If our condition for lifting the sanctions is Russia abandoning Crimea, then we&#39;re likely never going to be lifting them.&nbsp;
What&#39;s The Impact?&nbsp;
Our sanctions on Russia are certainly hurting the Russian economy, and making some Russian billionaires slightly poorer, but they are unlikely to pressure Russian President Vladimir Putin into acceding to our demands. Russia is self-sufficient when it comes to food, energy, and weapons, and Putin&#39;s powerbase is Russia&#39;s&nbsp;siloviki&nbsp;(former KGB types), not its &quot;oligarchs&quot; (a term that, if we&#39;re being honest, more accurately describes American centi-billionaires such as Jeff Bezos). As an American, my primary concern is what the sanctions&#39; impact will be on us, but a secondary concern is what the impact will be on those poorer than us.&nbsp;
The immediate impact on America has been most obvious at the pump. Gasoline prices are now at&nbsp;a record high. It&#39;s worth noting here that there is a small subset of Americans that is happy about this. I spoke to one representative of this class last week, a New York venture capitalist whose firm has invested in Twitter and numerous other Silicon Valley firms you&#39;re familiar with. When I noted that President Biden had inherited $2 per gallon gas, he replied that $2 gas was &quot;a bad thing&quot; because of its impact on the climate. Easy for him to say; for low-income Americans who have to drive to their jobs and can&#39;t afford Teslas, record gas prices are a severe hardship.&nbsp;
Americans May Be Poorer; Others May Starve
As bad as the impact of continued sanctions may be on America, it will be worse on poorer countries that aren&#39;t agricultural power houses. Russia is the world&#39;s&nbsp;largest exporter&nbsp;of wheat; Russia and Ukraine combined export 25% of the world&#39;s wheat.&nbsp;
<a href="https://static.seekingalpha.com/uploads/2022/3/12/131469-16471450538444643_origin.png" rel="lightbox"><img alt="" src="https://static.seekingalpha.com/uploads/2022/3/12/131469-16471450538444643.png" /></a>
Graphic via Al Jazeera.&nbsp;
If our current economic WWIII continues, it could lead to famine in some poorer countries.&nbsp;
Diminishing American Power, Weaker Dollar
Ultimately, our sanctions may lead to diminishing American power, and a weaker dollar, as non-Western countries diversify away from the dollar to avoid having their reserves frozen by us in a future conflict.&nbsp;
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This helps explain why the Saudis and others&nbsp;declined&nbsp;Biden&#39;s calls recently. What if a future American administration (or possibly the current one) decides the Saudis are worth of the same level of sanctions as Russia, due to the conduct of their war in Yemen?&nbsp;
Investment Considerations&nbsp;
As regular readers know, our system doesn&#39;t consider the macro picture when selecting its top names. Instead, it gauges stock and options market sentiment to estimate which securities are likely to perform the best over the next six months. Nevertheless, that bottoms-up approach is painting a clear macro picture when you look at our most recent top ten.&nbsp;
<img alt="" src="https://static.seekingalpha.com/uploads/2022/3/12/131469-1647145786386311.png" />
Screen capture via&nbsp;<a href="https://portfolioarmor.com/" rel="dofollow">Portfolio Armor</a>&nbsp;on 3/11/2022.
Our number one name on Friday was the Teucrium Wheat Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/weat#NYSE">WEAT</a>), and two other agricultural names made the list: the Teucrium Corn Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/corn#NYSE">CORN</a>) and nitrogen fertilizer producer CF Industries Holdings, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cf#NYSE">CF</a>). Fully half of our top ten were oil and gas names including Haliburton Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hal#NYSE">HAL</a>), Occidental Petroleum Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/oxy#NYSE">OXY</a>), and the United States Gasoline Fund LP (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/uga#NYSE">UGA</a>). Overall, our nine of our top ten names are bets on food and energy getting more expensive over the next six months.&nbsp;

Sanctioning Ourselves: American-Led Sanctions On Russia Lead To Higher Prices At Home. Inflationary Investing Considerations

Crude oil prices recently reached their highest levels in 13 years after&nbsp;President Joe Biden <a href="https://www.benzinga.com/government/22/03/26044413/us-bans-russian-oil-imports-in-response-to-ukraine-invasion-what-you-need-to-know">banned all imports of Russian fossil fuels</a> in response to the country&#39;s invasion of Ukraine. While crude oil is the main driver of global market uncertainty, a number of other commodities have also been extremely volatile since the Ukraine conflict began.
Unfortunately, commodities were already experiencing significant upward pricing pressure even before Russia entered Ukraine thanks to lingering pandemic supply chain issues, booming global demand and U.S. inflation levels at roughly 40-year highs. Here are five commodity ETFs that investors can buy if they believe inflation is here to stay.
United States Oil ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/uso#NYSE">USO</a>) 
The United States Oil ETF is by far the most popular way for investors to trade West Texas intermediate crude oil prices. The fund tracks front-month light sweet crude oil futures contracts, making it subject to severe contango. That contango means the fund significantly lags the price of WTI crude oil in the long-term, but it is an excellent way for traders to play oil prices in the short-term.
The USO fund has a 0.79% expense ratio, $3.2 billion in assets under management and a three-month average daily trading volume of 7.3 million, providing plenty of liquidity for investors. The USO fund is already up 47% year-to-date.
Energy Select Sector SPDR Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xle#NYSE">XLE</a>) 
The Energy Select Sector SPDR Fund is another option that provides diversified exposure to oil, gas and other energy prices that might be a more appealing option than the USO fund for long-term investors. The XLE fund provides investors with exposure to 23 different S&amp;P 500 energy <a href="https://www.benzinga.com/money/best-sectors-to-invest-in-right-now/">sector</a> stocks, including top holdings Exxon Mobil Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>), Chevron Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>) and EOG Resources Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/eog#NYSE">EOG</a>).
Because it invests in stocks and not futures, the XLE doesn&#39;t suffer from contango like the USO fund. It also has a miniscule 0.1% expense ratio and pays a generous 3.7% dividend.
Also Read:&nbsp;<a href="https://www.benzinga.com/general/entertainment/22/03/26026096/5-turnaround-ceos-who-saved-major-corporations">5 Turnaround CEOs Who Saved Major Corporations</a>
Barclays iPath Bloomberg Nickel Subindex Total Return ETN (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jjn#NYSE">JJN</a>) 
The Barclays iPath Bloomberg Nickel Subindex Total Return ETN is the best way for traders to play the extreme 2022 volatility in nickel prices. Gold prices are up 15.5% in the past year, but nickel prices have skyrocketed more than 200% in that time. Like the USO, the JJN continually rolls over nickel futures contracts, making it susceptible to underperformance due to contango over the long-term.
The fund has a 0.45% expense ratio, an AUM of $121.7 million and decent liquidity with a three-month average daily trading volume of more than 53,000 shares. The JJN fund is up 63.9% year-to-date.
Teucrium Wheat Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/weat#NYSE">WEAT</a>) 
The price of wheat recently surged above $12 per bushel for the first time in history. Russia and Ukraine account for a combined 29% of the global wheat trade. The Teucrium Wheat Fund is the best way for investors to trade the wild swings in wheat prices.
Like other ETFs that rely on futures contracts, the WEAT ETF suffers from contango. However, Teucrium agricultural funds attempt to minimize the impact of contango by spreading its futures holdings across multiple maturities.
The WEAT fund has a pricey 1.91% expense ratio, $86.5 million in and a three-month average daily trading volume of 2 million, providing plenty of liquidity for investors. The WEAT fund is up 44.7% year-to-date.
United States Gasoline Fund LP (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/uga#NYSE">UGA</a>) 
American drivers enraged by gas prices can help alleviate their pain at the pump by holding the United States Gasoline Fund. The UGA fund&#39;s futures-based strategy makes it subject to contango, but it is a great way for short-term traders to play the extreme volatility of a U.S. gasoline price shock.
U.S. gas prices recently topped $4 per gallon, and Gas Buddy is predicting U.S. gas prices will average $3.99 for the full year. The UGA fund has even outperformed the USO fund in 2022, gaining 50.5% on the year.

Long Ideas

iPath Dow Jones UBS Nickel Subindex Total Return ETN

5 Best Commodity ETFs To Buy As Oil Prices Soar

The initial surge in crude oil prices following Russia&#39;s invasion of Ukraine on Thursday subsided late in the day, and drivers and analysts now have some optimism that the Ukraine conflict may not have as big of an impact at the pump as some had feared.
Oil Volatility: After trading as high as $98.86 per barrel on Thursday morning, WTI crude oil prices were back down to $92.14 on Friday after the market digested the impact of the Russian aggression and the new round of sanctions imposed on Russia by the U.S. and other nations.
Related Link: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/22/02/25811871/how-the-markets-are-reacting-to-russias-invasion-of-ukraine">How The Markets Are Reacting To Russia&#39;s Invasion Of Ukraine</a> 
The national average gasoline price on Friday <a href="https://gasprices.aaa.com/">is $3.572</a> per gallon, up 4.4 cents from a week ago. At one point on Thursday, gasoline spot prices were up 17 cents on the day.
Still, gasoline prices continue to steadily rise in 2022, and the Ukraine conflict is likely to exacerbate the situation. U.S. gas prices averaged just $2.678/gal a year ago.
Russia&#39;s Impact: Russia is the second-largest oil producer in the world behind only the U.S. <a href="https://www.usatoday.com/story/money/2022/02/23/gas-prices-rising-russia-ukraine/6912371001/">About 7%</a> of U.S. gross petroleum imports come from Russia, and the U.S. gets about 3% of its oil from Russia.
While oil and gas prices pulled back from highs on Thursday, the Oil Price Information Service is projecting U.S. average gas prices will hit $4/gal in the second quarter of 2022.
GasBuddy analyst Patrick De Haan said Friday that yesterday&#39;s U.S. gasoline demand was the second-highest ever recorded for a Thursday.
&quot;According to GasBuddy data, Thursday U.S. gasoline demand surged 17.3% from the prior Thursday and was 21.1% above the average of the last four Thursdays,&quot; <a href="https://twitter.com/GasBuddyGuy/status/1497193332874879011">De Haan said</a>.
&quot;It&#39;s a good sign that the large jump in oil this morning has faded, and offers a glimmer of hope that increases in coming weeks and months may not be as astronomical as feared, but the situation remains fluid,&quot; he said on Thursday.
The United States Oil ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/uso#NYSE">USO</a>) traded slightly lower on Friday and is well off its Thursday morning peak levels, but it remains up 4% overall in the past five days and 54.6% in the last year. The United States Gasoline Fund LP (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/uga#NYSE">UGA</a>) is up 5% in the last five days and 60.2% in the last year.
Benzinga&#39;s Take: It&#39;s certainly irritating to U.S. drivers that gas prices have risen by nearly 90 cents per gallon in the last year, especially with spring and summer travel season just around the corner. Unfortunately, those prices will likely continue to rise in the near-term, but the Oil Price Information Service is projecting gas prices will fall back to $3.30/gal in the second half of 2022.

Gas Prices: Why Russia's Invasion Of Ukraine Will Increase Your Costs At The Pump

United States Gasoline Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UGA#NYSE">UGA</a>) shares experienced unusual options activity on Friday. The stock price moved up to $37.61 following the option alert. 
<ul>
<li>Sentiment: NEUTRAL</li>
<li>Option Type: TRADE</li>
<li>Trade Type: CALL</li>
<li>Expiration Date: 2021-08-20</li>
<li>Strike Price: $35.00</li>
<li>Volume: 201</li>
<li>Open Interest: 257</li>
</ul>
<h2>Three Indications Of Unusual Options Activity</h2>
One way options market activity can be considered unusual is when volume is exceptionally higher than its historical average. The volume of options activity refers to the number of contracts traded over a given time period. The number of unsettled contracts that have been traded, but not yet closed, is called open interest. These contracts are not yet closed because a buyer has not purchased the contract, or a seller has not sold it.
The trading of a contract with an expiration date in the distant future is another sign of unusual activity. Generally, additional time until a contract expires increases the potential for it to reach its strike price and grow its time value. Time value is important in this context because it represents the difference between the strike price and the value of the underlying asset. 
"Out of the money" contracts are unusual because they are purchased with a strike price far from the underlying asset price. "Out of the money" occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. Buyers and sellers try to take advantage of a large profit margin in these instances because they are expecting the value of the underlying asset to change dramatically in the future. 
<h2>Understanding Sentiment</h2>
Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price. 
These observations are made without knowing the investor's true intent by purchasing these options contracts. The activity is suggestive of these strategies, but an observer cannot be sure if a bettor is playing the contract outright or if the options bettor is hedging a large underlying position in common stock. For the latter case, bullish options activity may be less meaningful than the exposure a large investor has on their short position in common stock.
<h2>Trading Options With These Strategies</h2>
Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.
For more information to understand options alerts, visit <a href="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts" title="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts">https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts</a>

Movers

Understanding United States Gasoline Fund LP's Unusual Options Activity

On <a href="https://www.cnbc.com/video/2021/04/09/final-trades-dufry-uga-aapl-dal.html">CNBC&#39;s &quot;Fast Money Final Trades,&quot;</a> Barbara Ann Bernard said she likes Dufry (OTC: <a class="ticker" href="https://www.benzinga.com/stock/dufry#OTC">DUFRY</a>) and thinks it could double in three years.
James McDonald is a buyer of United States Gasoline Fund LP (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/uga#NYSE">UGA</a>).
Steve Grasso wants to buy Apple Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/aapl#NASDAQ">AAPL</a>).
Guy Adami would be a buyer of Delta Air Lines, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dal#NYSE">DAL</a>) going into earnings.
&nbsp;

AAPL

DUFRY

'Fast Money' Picks For April 12

Gas prices have been creeping higher throughout the holiday season, and the latest projections from GasBuddy suggest the trend could continue throughout 2018. Gas prices will likely be the highest this year that they have been since 2014, said GasBuddy analyst Patrick DeHaan.&nbsp;
GasBuddy projects U.S. gas prices will increase an average of 19 cents per gallon in 2018 and average $2.57 on the year. Prices will be nowhere near record levels and will remain below $3 in most of the country barring any major disruption, DeHaan said.
Major cities such as Chicago, Los Angeles and New York could be consistently shelling out $3 per gallon this year, according to the forecast.&nbsp;
For Americans wondering why gas prices are on the rise, DeHaan said OPEC&rsquo;s production cuts are the primary driver. OPEC cuts have lowered oil inventories by nearly 50 million barrels compared to one year ago.
&ldquo;Yet, understanding many factors, including OPEC, fuel taxes, the economy and their impact on supply and demand is integral to providing a thorough and balanced outlook on gas prices for 2018,&rdquo; DeHaan said.
Drivers should also be aware that the <a href="https://www.benzinga.com/etfs/specialty-etfs/17/07/9840579/attention-u-s-drivers-state-lines-can-be-danger-zones-for-gas-pric">price spreads</a> among different gas station competitors have also been on the rise, meaning drivers could be paying more for gasoline if they don&rsquo;t shop around.
&ldquo;It&rsquo;s become nothing short of crazy how one station might sell gasoline 20-40 cents lower or higher than a nearby competitor,&rdquo; he said.
<a href="https://www.cnbc.com/2018/01/02/oil-price-crude-could-hit-80-by-end-of-2018.html">One group</a> of investors are perfectly happy to see gasoline and oil prices on the rise. In the past six months, the United States Oil Fund LP (ETF) (NYSE: <a class="ticker" href="/stock/uso#NYSE">USO</a>) is up 29.2 percent and the United States Gasoline Fund, LP (NYSE: <a class="ticker" href="/stock/uga#NYSE">UGA</a>) is up 31.8 percent.
Related Links:
<a href="https://www.benzinga.com/general/education/17/12/10950992/this-day-in-market-history-opec-raises-oil-price-to-7-per-barrel">This Day In Market History: OPEC Raises Oil Price To $7 Per Barrel</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/17/12/10942745/the-end-of-the-year-oil-trade-is-spreading-to-leveraged-etfs">The End-Of-The-Year Oil Trade Is Spreading To Leveraged ETFs</a>

Pains At The Pump, Gains For Oil Investors: The 2018 Gas Outlook

Hurricane Harvey has triggered a unique phenomenon in the U.S. oil and gas industry. Since the devastating flooding in South Texas and Louisiana has disrupted far more crude oil refining capacity in the region than production capacity, the net result of the storm has been less crude oil being refined and less gasoline being produced.
In other words, an already bloated crude oil supply is getting even larger, while gasoline supply is shrinking. As a result, gasoline and crude oil prices have been headed in opposite directions.
According to <a href="http://fuelinsights.gasbuddy.com/">GasBuddy</a>, the national average U.S. gas price Thursday morning was $2.46/gal, up 4.6 percent from its average price a week ago. At the same time, WTI crude oil is trading at just $46.14/bbl, down 2.5 percent from a week ago.
According to LPL Financial, Harvey <a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/08/9996974/petroleum-paradox-explained-why-crude-prices-are-droppin">temporarily disabled</a> half of the oil-refining capacity in Texas, or roughly 15 percent of the nation&rsquo;s total capacity. Half of Texas&rsquo;s refining capacity is equivalent to roughly 2.75 million barrels per day. Earlier this week, Barclays estimated that Harvey knocked out roughly <a href="https://money.usnews.com/investing/stock-market-news/articles/2017-08-30/hurricane-harvey-hits-oil-stocks-but-some-harder-than-others">500,000 barrels</a> per day of crude oil production, well short of impact is had on refining.
But while heavy rains have finally moved on from most parts of Texas, investors shouldn&rsquo;t expect the oil market to return to normal overnight.
&ldquo;The impact could linger for several weeks or longer, depending on how long it takes Texas refiners to return to normal operations,&rdquo; GasBuddy analyst Patrick DeHaan said earlier this week.
Related Link: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/08/9982630/how-will-harvey-impact-oil-and-gasoline-prices">How Will Harvey Impact Oil And Gasoline Prices?</a>
Unfortunately for oil investors, Loop Capital Management analyst <a href="https://www.tipranks.com/analysts/stephen-gengaro">Stephen Gengaro</a> says it's still too early to accurately assess the full impact of the storm.
&ldquo;In general, we believe Hurricane Harvey will reduce inventory draws by about 1.5 mbpd over at least the next few weeks with a smaller headwind persisting for several weeks (at least) beyond that,&rdquo; Gengaro wrote on Thursday.
<a href="https://www.tipranks.com/analysts/stephen-gengaro"><img src="/files/images/2017/August/31/tipranks.png" width="350" height="35" alt="tipranks.png" /></a>
In the meantime, the divergence between oil and gas prices is likely to continue. In the past five days, the United States Oil Fund LP (ETF) (NYSE: <a class="ticker" href="/stock/uso#NYSE">USO</a>) is down 5.0 percent, while the United States Gasoline Fund, LP (NYSE: <a class="ticker" href="/stock/uga#NYSE">UGA</a>) is up 7.0 percent.
________ 
Image Credit: By R. Crap Mariner from Houston, USA [CC BY 2.0 (<a href="http://creativecommons.org/licenses/by/2.0" title="http://creativecommons.org/licenses/by/2.0">http://creativecommons.org/licenses/by/2.0</a>)], via Wikimedia Commons

Topics

Events

How Hurricane Harvey Has Impacted Gas Prices

Flooding from <a href="https://www.cnbc.com/2017/08/27/hurricane-harvey-refineries-shutting-down.html">Hurricane Harvey</a> is devastating the Houston and Galveston areas of Texas, major hubs for U.S. oil refining. Royal Dutch Shell plc (ADR) (NYSE: <a class="ticker" href="/stock/rds-a#NYSE">RDS-A</a>) (NYSE: <a class="ticker" href="/stock/rds-b#NYSE">RDS-B</a>), ExxonMobil Corporation (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>) and other major refiners have already shut down more than 1 million barrels per day of refining capacity in the region.
Although South Texas is also a center for oil and gas production as well, the Bureau of Safety and Environmental Enforcement said on Sunday that only about 378,000 barrels per day of production have been disrupted from <a href="https://www.benzinga.com/news/17/08/9973107/generators-to-insurers-trading-tropical-storms">the storm</a>.
In other words, at least at this point, lost refining capacity far exceeds lost production, meaning the nations refining logjam is set to get even worse until Houston plants get back online. From a practical standpoint, less refining capacity will likely mean higher gasoline prices and lower oil prices, a dynamic that is already playing out in the market Monday morning.
The national U.S. gasoline price on Monday stands at $2.38 per gallon, up more than 5 cents from a week ago. WTI crude oil prices were down 0.8 percent in early Monday trading to under $48/bbl.
&ldquo;Gas prices are up in many places and motorists should be gearing up for more in the coming weeks, thanks to Hurricane Harvey inundating significant refineries along the Texas coastline, leading to closures and tilting the delicate balance of supply and demand,&quot; said Patrick DeHaan, senior petroleum analyst for GasBuddy.
Related Link: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/08/9976610/a-host-of-upgrades-for-offshore-oil-companies-as-rbc-see">A Host Of Upgrades For Offshore Oil Companies As RBC Sees A Recovery</a>
Drivers shouldn&rsquo;t expect the pain at the pump to go away anytime soon, even if the rainfall ceases in Texas.
&ldquo;The impact could linger for several weeks or longer, depending on how long it takes Texas refiners to return to normal operations,&rdquo; DeHaan said.
In the meantime, oil and gas traders will be watching the weather closely and keeping an eye on both the United States Oil Fund LP (ETF) (NYSE: <a class="ticker" href="/stock/uso#NYSE">USO</a>) and the United States Gasoline Fund, LP (NYSE: <a class="ticker" href="/stock/uga#NYSE">UGA</a>).
Disclosure: The author is long RDS.B.
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Image Credit: By Jill Carlson (jillcarlson.org) from Roman Forest, Texas, USA - Hurricane Harvey Flooding - 8/26/17 to ?, CC BY 2.0, <a href="https://commons.wikimedia.org/w/index.php?curid=61979705">via Wikimedia Commons</a>

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How Will Harvey Impact Oil And Gasoline Prices?

도널드 트럼프 대통령이 4월 2일(수요일) &#8216;해방의 날&#8217;을 앞두고 있는 가운데, 골드만삭스는 트럼프 행정부가 제안한 상호 관세가 미국 정유 제품 가격을 크게 부풀릴 수 있는 반면 <a href="https://www.benzinga.com/markets/commodities">경질유 가격</a>에는 약간의 지지만 제공할 수 있다고 경고했다.
화요일(1일) 발표된 리서치 노트에서 골드만삭스의 원자재 애널리스트인 캘럼 브루스(Callum Bruce)는 두 가지 관세 시나리오와 미국 석유 시장에 미칠 잠재적 영향에 대해 설명했다.
<h3>원유 관세 면제 불투명</h3>
골드만삭스의 경제학자들은 미국 무역 파트너 전체에 15%의 상호관세가 부과될 것으로 예상하지만, 예외를 제외하면 실효 관세율은 약 9% 포인트까지 낮아질 수 있다.
현재 골드만삭스는 기본 시나리오 예측에 원유 관세를 포함하지 않지만 캐나다 관세 부과 기간 동안 적용된 것과 같은 부분 면제의 역사적 선례를 인정하고 있다.
그럼에도 불구하고 원유 및 정유 제품의 면제 여부가 명확하지 않기 때문에 골드만삭스는 가벼운 시장 변화부터 심각한 가격 혼란에 이르기까지 다양한 잠재적 결과를 내놓았다.
<h3>시나리오 1: 원유 수입에 10%의 보편관세 부과</h3>
이 경우 골드만삭스는 캐나다산 원유에 대한 수출 제약과 미국 정유업체들이 더 무거운 등급을 처리하도록 맞춤화되어 있기 때문에 "캐나다와 라틴 아메리카산 중질유가 크게 할인되고 계속 유입될 것"이라고 예상한다.
그러나 정제 제품은 즉각적인 가격 영향을 받게 될 것이다.
브루스는 United States Gasoline Fund LP(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UGA#NYSE">UGA</a>) 펀드가 추적하는 미국 벤치마크 마진과 뉴욕 항구의 디젤 마진이 배럴당 6달러까지 상승할 수 있으며, 특히 국내 정제 능력 부족과 할인 수입에 대한 접근 제한으로 가격 압력이 증폭되는 해안 지역에서 더 심할 것으로 추정한다.
유가에는 영향이 미미할 것이다. 브루스는 미국이 생산하는 경질유와 대부분의 미국 정유사가 필요로 하는 중질유 사이의 불일치를 고려할 때 "미국 국내 원유 가격과 미국 생산량에 대한 명확한 상승은 없을 것"이라고 예상했다.
정책 충격에도 불구하고 미국이 정유공장이 효율적으로 처리할 수 있는 것보다 더 많은 경질유를 생산하기 때문에 WTI와 같은 미국산 경질유 가격은 제한적인 상승을 보일 것이다. 이러한 구조적 불일치로 인해 국내 생산업체에 대한 수요 견인력이 감소하여 큰 상승폭이 제한된다.
<h3>시나리오 2: 10% 이상 관세로 글로벌 시장 혼란 야기</h3>
더 공격적인 관세율은 더 큰 변화를 촉발할 수 있다.
브루스는 "미국산 원유 수입에 10% 이상의 관세가 부과되면 중질유 배럴이 미국 밖에서 새로운 집을 찾도록 점점 더 많은 인센티브를 제공할 수 있다"고 말했다.
이러한 변화는 전 세계적으로 정제 시스템이 최적이 아닌 원유 슬레이트에 의해 제약을 받으면서 "특히 미국에서 상당히 높은 정제 제품 가격"으로 이어질 것이다.
골드만삭스는 미국 정유 공장에서 중질유가 경질유로 대체될 때마다 경질유와 중질유 스프레드가 배럴당 2달러씩 확대될 것으로 추정한다. 그러나 이러한 조정의 대부분은 경질유 프리미엄이 아닌 중질유 할인을 통해 이루어질 가능성이 높다.
골드만삭스는 해상 중질유가 하루 120만 배럴, 인프라가 허용하는 경우 미국 걸프 연안을 통해 재수출할 수 있는 캐나다 파이프라인 원유가 하루 100만 배럴이 추가로 위험에 처한 것으로 파악하고 있다.
골드만삭스는 관세 발표가 임박했음에도 불구하고 시장이 유가 리스크를 가격에 반영하고 있다는 증거는 거의 없다고 보고 있다.
브루스는 "뉴욕항 정제 제품의 현재 시장 가격과 캐나다 현지 원유 차이는 광범위한 석유 면제나 석유 관세율 인하 없이 미국의 잠재적 수입 관세에 대한 현재의 위험 프리미엄이 최소화되었음을 시사한다&#8221;고 말했다.
사진: Shutterstock
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골드만삭스, 트럼프 '해방의 날' 관세가 미국 연료 가격을 급등시킬 수 있다고 경고

<a class="author-name" href="https://www.benzinga.com/author/zacks" data-action="Clicked Author Link">Zacks</a>의 기고
올해 상품들은 눈부시게 성과를 올리며 놀랍게도 블룸버그 상품 지수(Bloomberg Commodity Index)가 지난 11월 이후 최고 수준으로 상승했다. 석유, 금, 초콜릿의 가격상승으로 인한 랠리가 대부분의 원동력이었다.
상품 ETF들이 대부분 급등한 가운데 유나이티드스테이츠 오일 펀드 (United States Oil Fund) (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) , 유나이티드스테이츠 브렌트 오일 펀드 (United States Brent Oil Fund) (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>), 인베스코 DB 애그리컬처 펀드 ( Invesco DB Agriculture Fund) (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBA#NYSE">DBA</a>), ), 유나이티드스테이츠 가솔린 ETF (United States Gasoline ETF)(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UGA#NYSE">UGA</a>)와 그래나이트셰어 골드 트러스트 (GraniteShares Gold Trust) (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BAR#NYSE">BAR</a>)은 올 한 해 동안 가장 눈에 띄었다.
우크라이나의 러시아 에너지 시설 공격과 중동의 에너지 공급을 위협하며 점점 더 격화되는 갈등으로 인해 국제 원유 가격이 7개월 만에 최고점을 기록하면서 브렌트유는 89달러 이상, 미국 원유는 85달러에 이르기까지 각각 9월 초 이후 처음으로 최고가를 기록했다. 올해 초부터 브렌트유와 미국 원유 가격은 각각 15%와 19% 상승했다. 다가오는 여름 운전 계절을 앞두고 가스 가격도 점차 상승하기 시작했다.
금과 은 같은 귀금속도 3월에 비행을 시작했다. 3월에는 미국의 6월 금리 인하 기대치가 새롭게 부상하면서 귀금속은 강세를 보였는데, 이에 따라 3월에는 국내에서 새롭게 8.5% 상승하면서 3년 이상 만에 가장 큰 월간 상승을 기록했다.
한편 은 가격은 산업과 제조에 대한 수요가 증가함에 따라 올해 처음으로 온스 당 25달러를 넘어선 상태다. 글로벌에서는 5G와 같은 영역의 수요 증가, 글로벌 컴퓨터 출하의 반등, 태양전지 및 자동차 산업 및 IoT 및 OLED 조명에 사용되는 센서에 대한 새로운 수요가 은 수요를 촉진하고 있다.
동일산업의 구리와 니켈 같은 산업용 금속들도 수요 증가로 가격이 상승하고 있으며 이는 전기차 생산의 증가에 힘입고 있다. 특히 중요한 것은 중국의 구리 제련소들이 감산을 하겠다는 약속 이후 3월에 구리 가격이 11개월 만에 최고점을 기록했다. 중국은 글로벌 구리 공급의 절반을 제련하기 때문에 중국의 결정이 구리 시장의 전체적인 사정을 크게 좌우할 것이다.
농산물 관련해서는 3월에 초콜릿 가격이 1/4분기에 거의 3배로 상승하여 50년 전에 세운 기록을 2배로 넘어서는 새로운 역사적인 최고가를 경신했다. 올해 초 초콜릿의 가격은 1톤당 3,000달러에서 1톤당 10,000달러로 치솟았다. 서프라이즈는 3년 연속으로 서부 아프리카에서의 열악한 수확으로 인한 생산량 부족이 원인이었다.
다음은 ETF에 대한 프로필이다. 
United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) – 상승률 21.2% 
United States Oil Fund는 14억 달러의 자산을 보유한 원유 관련 ETF로 하루 평균 400만 주의 거래량을 기록한다. 이 ETF는 30일 동안의 순자산 가치의 평균 일일 백분율 변화가 동일 기간 내의 Benchmark Oil Futures Contract 가격의 일일 백분율 변화에 대해 +/- 10%의 평균 일일 백분율 변화를 추구한다. 이 ETF의 운영비는 0.60%다.
United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) – 상승률 19.7% 
United States Brent Oil Fund는 브렌트 원유의 일일 가격 변동을 추적하기 위해 설계되었다. 이 ETF는 ICE Futures 거래소에 상장된 월물 선물 계약에 노출시킨다. 월물 선물 계약이 만기일로부터 2주 이내에 있는 경우, Benchmark는 만기를 2주 뒤에 하는 월물 선물 계약이 된다. BNO는 주로 상장된 원유 선물 계약 및 기타 유관 선물 계약에 투자하고, 포워드 및 스왑 계약에 투자할 수 있다. 이 ETF의 자산 기준은 1억 3420만 달러이며, 연간 수수료와 경비로 1.00%를 부과한다. BNO는 평균 1일 60만 주의 거래량을 보유하고 있다.
Invesco DB Agriculture Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBA#NYSE">DBA</a>) – 상승률 19.4% 
Invesco DB Agriculture Fund는 가장 유동성이 높고 매우 활발하게 거래되는 농산물 선물 계약에 노출된 DBIQ Diversified Agriculture Index Excess Return을 추적하는 ETF이다. 이 ETF는 커피와 라이브 소를 중심으로 코코아, 이중자리수 비중을 가졌다. Invesco DB Agriculture Fund는 연간 930억 분의 1의 수수료를 부과하며 하루에 40만 주의 거래량을 보유하고 있다. 이 ETF의 자산 기준은 78억 8600만 달러가 쌓였다.
United States Gasoline ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UGA#NYSE">UGA</a>) – 상승률 18.9% 
United States Gasoline ETF는 가솔린 가격의 변동을 백분율로 추적하기 위해 설계된 ETF이다. 벤치마크 선물 계약은 NYMEX에서 거래되는 가솔린 선물 계약이다. 월물 선물 계약이 만기일로부터 2주 이내에 있는 경우, Benchmark는 만기를 2주 뒤에 하는 월물 선물 계약이 된다. 하루에 약 2만 8000의 거래량을 가진 이 ETF의 연간 운용비는 0.97%다. UGA의 자산은 1억 2300만 달러이다.
GraniteShares Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BAR#NYSE">BAR</a>) – 상승률 10.4% 
GraniteShares Gold Trust는 금 가격의 성과를 추적하기 위해 설계되었다. 이 ETF는 금에 대한 투자를 위해 금 계정을 개설하지 않아도 신뢰를 통해 금에 대한 투자와 유사한 투자를 제공한다. 이 ETF의 운용비는 0.17%로 시장에서 가장 저렴한 가격의 금 ETF 중 하나이다. GraniteShares Gold Trust는 10억 달러의 자산을 보유하며 1일 평균 663,000주의 거래량을 보유하고 있다.

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