As we have noted, demand for gasoline is picking up… Here is today’s WSJ (http://www.wsj.com/articles/thirst-for-gasoline-fuels-oil-rally-1459391248):
“Several factors have combined to produce a rise in gasoline consumption, including an unusually mild winter and an economy that added more than 200,000 jobs in both February and March. Consumers also are buying more sport-utility vehicles and trucks, which burn fuel less efficiently. Meanwhile, pump prices are among the lowest in 12 years.
The result: U.S. gasoline demand hit record levels in March. Government estimates released Wednesday show consumption averaged more than 9.4 million barrels a day in the four weeks that ended Friday. That is a level usually found only during peak summer driving season, and it compares with roughly 8.8 million barrels a day in March of both 2014 and 2015.”
“The gasoline-demand trend could continue, thanks in part to vehicle sales in the U.S. and China that are up 10% to 15% and the renewed preference for cars that burn more fuel, Citigroup Inc. said in a recent note.”
Me: Strong gasoline demand with continued growth in total energy stocks probably indicates a trading range market ahead with crude trading $35 to $42… The options market says maybe not as recent lower price move (from $42 to $38) has increased implied volatility by 6 points to 46% in the front month… Implied vol has ranged from around 40 to 80 in the past couple of months…