Have Gas Prices Peaked? Morning Business Memo
Motorists in many states are now paying about $4 a gallon for gas. The latest weekly report from the US Energy Department today is expected to show another price jump in the past week. But oil industry analysts say it may not go much higher. Trilby Lundberg, whose firm puts out its own survey of pump prices, says crude oil prices have started to ease, and there's plenty of supply and refinery capacity.
The changeover from winter to summer gas formulas is the latest cause of higher prices. But these pressures ease after refineries complete the switch. Looking ahead to the summer and fall gas prices may come down a bit, but "in the rest of the world the demand for crude oil, mostly from developing countries, is pretty brisk," says Tom Kloza of the Oil Price Information Service. The global cost of crude is the biggest cause of high US gas prices.
Will expensive gas take a sizeable bite out of consumer confidence? We may find out more this week. Two new reports on confidence will be released. The National Association of Realtors pending home sales index will also be released, giving a reading on the spring outlook for sales.
As Americans pay about $4 per gallon for gasoline, they're wasting 1.9 billion gallons of it annually in traffic jams, a new Treasury Department report says. Traffic congestion costs drivers more than $100 billion annually in wasted fuel and lost time, according to survey. The findings were released in support of President Obama's plan to upgrade and expand America's transportation infrastructure. The White House wants more spending, but most Republicans in Congress oppose additional federal spending on public transportation projects.
If you can't beat 'em join 'em. Many hedge funds took a real beating in the past six months betting against stocks. Now says Bloomberg News, hedge funds are becoming more bullish, "giving up on bearish bets and buying stocks at the fastest rate in two years." The S&P 500 stock index is up 27 percent since early October.
Red faces at BATS. The CEO of BATS Global Markets has made a public apology for the sudden withdrawal of his company's initial public offering. The exchange operator messed up the listing of its own IPO on Friday. When BATS was launched seven years ago it claimed the firm was the future of stock trading with faster and more efficient price quotes. The computer glitch at BATS gives ammunition to critics of the current computerized market system. But regulators say circuit breakers kicked in once the BATS system went down.
Richard Davies Business Correspondent ABC NEWS Radio twitter.com/daviesabc