The unexpected disruption in the oil market has been called a “black swan” event by some, and now there’s a chance it could be gasoline’s turn.
The oil supply glut has turned into a refined product glut for gasoline at least, as refineries produced a record amount of gasoline during part of December, and the U.S. imported an unusually high amount of gasoline for this time of year.
That has resulted in some gasoline prices in the spot market at lower prices than the cost of crude, says Tom Kloza, founder and analyst at Oil Price Information Service. Kilduff expects to see a national retail average under $2 for gasoline at the pump, while Kloza expects it to bottom at $2.13 to $2.19 per gallon.
Stock market guru Laszlo Birinyi recently likened the wild drop in oil to a black swan event. “What we’ve seen is something people have been talking about for two, three, five years and no one is talking about it now,” said Birinyi, founder of Birinyi Associates.
“It’s just a black swan. … A totally unpredictable event. It comes clearly out of the blue. Four standard deviations out of anything else. In a case like that, there are no perimeters.”
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