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The summer driving season will be upon us starting the May long weekend
OPEC is not scheduled to meet until May 28 to discuss production levels, so with winter demand over, we expect crude inventories to continue building. The summer driving season will be upon us starting the May long weekend and we don’t expect gasoline prices to rise more than 15 cpl over current levels.
Consumers are minimizing spending at all levels due to lack of credit and fear of entering the unemployment line. The March U.S. unemployment data showed that another 663,000 people were downsized, putting the current U.S. unemployment rate at 8.5%, (the highest since 1981/82), while Canada’s unemployment rate in February had climbed to 7.7%. The increasing job loss will contribute to further erosion of petroleum demand as consumer spending represents 70% of economic activity. Until this turns around, demand will be anemic and there is no justification for higher energy prices. For the next few months we expect more negative economic news will continue to impact the energy markets. So, what are we forecasting crude prices to be at and what will President Obama’s stimulus plan, along with the G-20 Summit mean for Canadian businesses? And what does the EIA’s report on distillates and crude mean for the oil industry?
By: Roger McKnight, Senior Petroleum Advisor
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