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Investments are pouring into a profit window in the form of gas prices expected to rise with one of the US calendar’s biggest holidays.
The US Independence day on July 4th has traditionally been met with increased traffic all over the country with this year’s celebrations seen to bring the greatest amount of motorists on the road in seven years as 34.8 million people are forecast to travel at least 50 miles in the week of the holiday.
Coupled with persisting conflict in the Middle East, it makes for a situation that is hard to resist for many hedge fund and other money managers. Both Net-long trades and long positions for gasoline went up by 7.6% and 5.5% respectively last week, while short positions decreased by 0.3, according to data from the US Commodity Futures Trading Commission. Anticipation for the historical higher demand during the months of July and August has already helped the price of a gallon of gas on the New York Mercantile Exchange to gain by 1.1% to $3.1258. The energy commodity has seen itself rise in value by 11% in 2014 so far.
The US’ largest group of motorists, the American Automobile Association, says that drivers will have to spend more for fuel when compared to the past few years. The average price per gallon of regular gasoline was at its highest in almost two months last week when it reached $3.684.
Additionally, futures for gasoline peaked to its highest in eleven months on June 23rd due to Islamist insurgents in Iraq creeping closer to the capital of Baghdad, but soon fell when output was revealed to be undisturbed. According to the Energy Information Agency, demand for gasoline has been with increasing with the US consuming 1.7% more gasoline per day to reach 8.95 barrels in June compared to the year before.
