Gasoline Futures Jump 6.3%; Crude Finishes Flat
U.S. gasoline futures soared 6.3% Friday--a jump some traders attributed to investors covering bets on lower prices as the current futures contract expired.
Reformulated gasoline for October delivery rose 19.8 cents to settle at $3.3420 a gallon, as the front-month contract came to an end on the New York Mercantile Exchange. By contrast, the next contract, November, finished the session at only $2.9167 a gallon.
Traders and analysts said the jump in the October contract likely was caused by investors who had bet the contract's prices would be lower, known as being caught short, and had to rush to buy futures to cover those positions.
"Obviously somebody was short big time," said Kyle Cooper, managing partner for IAF Energy Advisors in Houston. "That was such a huge move I couldn't see much significant fundamental justification for it."
The dramatic rise in October gasoline futures didn't carry over to crude oil or other petroleum products. West Texas Intermediate crude, the U.S. benchmark, settled up 34 cents, or 0.4%, at $92.19 a barrel.
"Many traders don't believe gasoline strength is going to be sustainable," said Andy Lebow, a trader with Jefferies.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.