Two Big Reasons Gas Could Spike

Wednesday, 10 Jul 2013 | 8:43 AM ET
Firefighters battle blazes after a freight train loaded with oil derailed in Lac-Megantic, Quebec, on July 6, 2013.
François Laplante-Delagrave | AFP | Getty Images
Firefighters battle blazes after a freight train loaded with oil derailed in Lac-Megantic, Quebec, on July 6, 2013.

Two recent developments could spike gasoline prices in the near future.

The first is Saturday's devastating derailment of a train carrying a load of crude to an Irving Oil refinery in Canada. The St. John's refinery has the capacity to process 300,000 barrels of crude a day, making it Canada's largest. And most of that refining capacity goes toward making gasoline. The tracks that run these trains were heavily damaged, and officials say it will take weeks or longer to fix them.

(Read More: Fatal Oil Train Disaster Brings Scrutiny to Oil-by-Rail Boom)

The second development is the formation of the season's first tropical storm, Chantal. This in itself has had little-to-no impact on refiner operations, but it does remind traders that it is hurricane season, and you don't want to be caught short when a disruptive storm is coming.

5 Dead in Oil Train Derailment
NBC's Katy Tur has the details of the train disaster in Canada. A train carrying 50,000 barrels of crude oil derailed and exploded.

Two smaller factors also will support gas in the near-term. First, we are in the peak of driving season, improving demand. Second, tensions in the Middle East are keeping crude oil at a premium.

In terms of the gasoline chart, look for support to come in at $2.88 to $2.90, and resistance at $2.98 and $3. If there's a prolonged outage on the tracks and demand picks up and storms start forming, look for gas to test $3.10.

—Anthony Grisanti is the founder and president of GRZ Energy. Follow him on Twitter: @AnthonyGriz

Watch "Futures Now" Tuesdays & Thursdays 1 p.m. ET exclusively on FuturesNow.CNBC.com!

Like us on Facebook! Facebook.com/CNBCFuturesNow.

Follow us on Twitter! @CNBCFuturesNow.

Contact Futures Now

  • Showtimes

    Watch Futures Now Tuesdays & Thursdays 1p ET exclusively on cnbc.com!

Sponsor Links

  • CME Group brings buyers and sellers together through its CME Globex electronic trading platform and trading facilities in New York and Chicago.

  • Take your trading to the next level with a platform that lets you trade stocks, options, futures and forex all in one place with no platform or data with no trade minimums. Open an account with TD Ameritrade and get up to $600 cash.