Gasoline prices have rallied for eleven straight days. There is one specific company that is particularly affected by rising gas prices.
Gasoline prices have rallied for eleven straight days. Over the last two weeks, the gasoline contract trading on the NYMEX is up nearly $0.21. Meanwhile, oil is trading near $108 per barrel, hitting levels not seen early last year. Just three months ago, black gold was trading $20 lower.
Of course, it’s not just drivers paying higher prices at the pump. Companies, too, face higher fuel costs to keep their factories and trucks running. That raises prices for consumers as companies try to pass some of costs on. Otherwise, the companies take a hit on their profit margins.
Is there one specific company that is particularly affected by rising gas prices? Yes, says John Stephenson, senior vice president and portfolio manager at First Asset Investment Management and author of “The Little Book of Commodity Investing”. The company he is talking numbers about warns that just a $0.01 increase in gas prices impacts consumers’ disposable income by $1 billion. So, last two weeks in gas price hikes mean $21 billion gone from consumers’ wallets, and that will hit this company particularly hard.
On the technicals, Abigail Doolittle, Techinical Strategist at The Seaport Group, says the charts are also giving her reason to be cautious.
Watch the video above to hear what company will be hit hard by higher gas prices and to see Stephenson and Doolittle analyze it.
[Disclosures: First Asset Investment Management holds shares of Wal-Mart.]