AI
Thursday, December 11, 2014 6:04:25 AM
Look at this chart to see Gasoline vs Oil price.
http://www.GasBuddy.com/gb_retail_price_chart.aspx?city1=USA%20Average&city2=&city3=&crude=y&tme=132&units=us
You might notice that the drop in the gas price was less in 2008 then could be expected from just the oil drop. This year and the last couple of years the Gas price was higher then just would be expected from the oil price.
So I think Gas will not drop just as much. It seems like oil companies are able to get more profit out of gas.
As for PEIX and the rest of the ethanol market, they are not just depending on US usage of gas. Export is also important and I think that ethanol demand stays high enough to stay profitable.
Sentiment the thing dragging PEIX down the most. I think Ethanol will recover for sure, since demand will stay high enough. And as oil prices drop, the demand for oil will also at some point start to rise.
No drop in the past has taken longer then a couple of months. I'm not saying oil price will recover as fast as it did drop, but by the end of next year, this price level will be far behind us, and people will wish gas was as cheap as it is today.
And PEIX will be trading at levels much higher then it is now.
http://www.GasBuddy.com/gb_retail_price_chart.aspx?city1=USA%20Average&city2=&city3=&crude=y&tme=132&units=us
You might notice that the drop in the gas price was less in 2008 then could be expected from just the oil drop. This year and the last couple of years the Gas price was higher then just would be expected from the oil price.
So I think Gas will not drop just as much. It seems like oil companies are able to get more profit out of gas.
As for PEIX and the rest of the ethanol market, they are not just depending on US usage of gas. Export is also important and I think that ethanol demand stays high enough to stay profitable.
Sentiment the thing dragging PEIX down the most. I think Ethanol will recover for sure, since demand will stay high enough. And as oil prices drop, the demand for oil will also at some point start to rise.
No drop in the past has taken longer then a couple of months. I'm not saying oil price will recover as fast as it did drop, but by the end of next year, this price level will be far behind us, and people will wish gas was as cheap as it is today.
And PEIX will be trading at levels much higher then it is now.
