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Gasoline Inventories Jump To 20 Year High As Gas Price Surges
After the ABC Consumer Comfort index yesterday plunged to 2011 lows (stunning we know: don't these ungrateful, unwashed discontents not realize the Russell 2000 is about to take out the Fed's 36,000 limit order) due to surging gasoline prices, today we see precisely what this means from a simple supply/demand perspective. According to just released DOE data, total gasoline inventory has just hit what is virtually an all time high... and certainly the highest since 1990. Surely, this is bullish or something. It is certainly refreshing to see that at least the key equation of economics, that surging price results in plunging demand, has still not been LBOed by Bernankestein.
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That explains the job growth!
Also explains why oil is high, dollar is good as gold yes sir..
What is it about the 22% of unemployed people not driving back and forth to work every day, and not shopping for trinkets and baubles people don't get? I've been saying this for days here at ZH.
It's like the government unemployment lying static of 9%. The real unemployment figure shows up at the voter ballot box.
I did think the gasoline inventory would be somewhat suppressed from all the snow plowing this winter. I guess the unemployed overwhelmed that crew of gas guzzlers.
Supply high, demand low, price surging....Bernankonomics! :D
didnt ZH have a post way back when....last night....we should buy oil? like i said last night, demand in the US is at decade lows and inventories are at all time highs (thus my reference to buying oil and needing to store it in your swimming pool).
They were talking about energy as a long term play versus short term speculation.
Cost-Push inflation will drive the price of energy up regardless of demand. It's a dollar hedge.
I am Chumbawamba.
Yup, looks like last night's Oil's thread about supply, demand and speculation has more legs...
Let the JUNKing begin
+1 - Great idea for a T-shirt SD1 --> You should joint venture the tshirt idea with WB7
Damnit. I picked the wrong year to give up arson.
Then I suppose you won't mind if I get that book of matches from yaz...
http://www.youtube.com/watch?v=4WcnDBq9Ilc
Next leg down in 3...2...1
Why is diesel so damn expensive? Could it be that gasoline demand no longer drives the price of oil?
They got to fill all them tractor trailers filled with crap we don't need from China to get from the ports to the WalMarts. Like duh!
And we can't use trains... that would put too many teamsters out of work.
I recall mention of a policy (regretably no reference) that the oil companies send excess (?) diesel fuel to Europe as most of their privately owned vehicles are diesel powered. In exchange the US receives excess (?) gasoline from Europe.
It was a rhetorical question....
It will take about 10 minutes for someone to spin it as building a strategic reserve. Government all good.
any cds on refinery fire insurance co.'s out there ?
I like your thinking!
And I like your... never mind.
Broken, fake supply/demand economy....bitchez!
Priced for stupid...bitchez!
Maybe if we turn that corn into ethanol it will all make sense.
+ limit up, we need more distillates!
deliveries by refineries hit a 40 year low:
http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=a1036000...
Wow, have people really cut their gasoline consumption by 1/3rd?
Or is this related to ethanol subsidies (where ethanol producers burn diesel to produce ethanol that only goes into gasoline, effectively creating a gasoline subsidy)?
A 10% drop I could believe, but 30%?
Hard to breakdown all the components, but this is certainly part of it.
I think people have been losing jobs, cutting down on commutes, working at home etc.. This trend has been going on for awhile now. The oil price spike also scared some people who bought Prius(s) etc..
+1
The traffic congestion on my commute is getting less and less and less... And it ain't because people are taking public transportation.
This unemployment thing looks very green. If we all quit our jobs, maybe we could stop global warming.
Well personally Id like some global warming. Im about sick of this -20 where we normally have +30 average this time of year.
quit yer bitchin.. -40 windchill here, ha sucks don't it.. I am done with winter..
You also must take into account that a significant fraction of gasoline is imported, most European refiners ship their excess gasoline to the US. The graph is gasoline production by US refiners, not US gasoline comsumption.
Total petroleum product supplied shows a similar decline:
http://www.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WRPUPUS2&f=4
As one would expect, you can fiddle with the cracking ratios only so much...
Your graph does show a rising trend in prodcuts supplied following the 08-09 implosion...
I suspect dec 2010 had increased speculative buying as well as increased consumption for the xmas season. However, the first week of 2011 and we are back below 20 mb/d. I think they caused a depression on purpose in anticipation of supply constraints later this decade but that is probably just my tinfoil hat on too tight.
Data is pretty noisy, hard to draw conclusion on a mom basis. There was a crack-up boom that culminated in '08, and the now TPTB want another one. Ignore it all, just buy gold, oil and NG on the dips. By oil and NG, I mean the cash flow via the Royalty trusts.
Natty is a conundrum.
Lots of opinions on NG, it's a complex beast.
CHK selling their Haynesville properties
http://tmx.quotemedia.com/article.php?newsid=38238580&qm_symbol=CHK:US
is one hell of a tell on the economics of shale gas....Take what you will from this tidbit.
Underlevered conventional plays are the way to go. Own the cash flow, not the paper promise.
Don't buy NG unless it can be shipped overseas (not really sure on this, it was my understanding that it was hard to ship by any means other than pipeline), or unless you think there will be some sore of recovery on THIS continent.
Yes, its a bitch to ship as LNG. My logic is as follows, gas is near a short term floor, shale while capable of providing supply can't do it for less than $7-$8 for an extended period. I can buy a trust paying 5% with a sweet heart tax treatment at basically the bottom in the long term cash-flow. Bet the farm? No, diversify and buy any dips, hell yeah.
Go long ung! Margin up bitchez! Get out at 5.85
There is a difference between wealth management and speculation... Hey, fill your boots, hope it works out.
Data is pretty noisy, hard to draw conclusion on a mom basis...
Agreed.
No no no. Go long ung and margin up. Get out at 5.85 in the next week.
peak oil? how about peak gas! that's a stunning drop .. I don't know what to make of it though.
If it were due to peak gasoline then inventories would be low.
See this is a good thing. The suppliers are clearly building up for the spring driving season. The building inventories will drive the prices down just in time. ...... insert sarcastic voice here.....
YES spring is coming...and all the bankrupt unemployed americans will start their 'driving season'...awesome!
I thought they built inventory to take the heat off as they transition to Spring / Summer formulations less volatiles included in the mix.. I was always told if storing gas buy in Winter the formulation lasts longer with or without PRI-G.. Refinery guys set me straight??
That is part of it, this is as good a discussion as you will find
Winter:
http://www.theoildrum.com/node/2964
Summer:
http://www.theoildrum.com/node/2374
Assays:
http://www.theoildrum.com/node/4038
Don't they have to switchover to the summer brew? At least that's the reason they usually give for the mid-April gas price increases in my area.
Yes, and they increase prices again in the Fall when they switch to the Winter brew.
I need to go back to Purdue and retake Economics 101, they had it all wrong back in the 90's......
all economics in the 90's was based on cocaine consumption and escort usage.
otherwise known as "the good ole days".
Well, if you have a virtual job, you only need virtual gas for the virtual drive to work.
Misery is the output when food price is the variable.
This is really not so difficult to understand.
People who own storage tanks where gasoline may be stored,
may stockpile gasoline for the same reasons that other people
who have dependable living space stockpile gold or silver coins.
Its not because supply is increasing, its not because demand is diminishing,
its because they have the expectation that gasoline prices are going to rise.
And, since many of the people who own these tanks are insiders in the business,
they have a better-than-average chance of being right.
hedge funds have been known to do this. there was that famous liar moment after the 2006 midterms. in the previous spring Goldman rejiggered their index and dropped gasoline, which sent the fund managers who emulate these things running for the exit. prices fell. there was also a shell game being played with SPR refills from enterprise from lendouts during Katrina. The oil was transferred on the books, but not from the tanks, and then double counted. traders kept pushing the spread up against socalled crude inventory builds. after that the hedge funds started buying their own oil, but the government took some steps to correct the professional hoarding.
the situation going into the 2012 will be even more political. but if history is any indicator the Obama people will allow prices to rise, with the purpose of deflating them at the proper time. the idea is this, if gasoline is 3.50 today, and 5.00 on Jan1, 2012, and 3.50 again by election day, that's a big boost for the administration.
How is rising gas price a bonus for the sitting president? It is a negative.
its a bonus after he brings it back down to where it was, the sheeple have very short attention spans
They should raise the prices higher to compensate for lost profit. Isn't that how we do it now?
Hi supply, low demand, stratospheric prices. S....st...stag...
"Watch in absolute wonder as the demand for oil plunges and it's price goes thru the roof."
ANOTHER, 1997
Oil was $10 a barrel in 1999, and gasoline was about $1.03 a gallon.
1999 anyone?
Average Cost of new house $131,750.00
Average Income per year $40,810.00
Average Monthly Rent $645.00
Cost of a gallon of Gas $1.22
Average cost of new car $21,050.00
US Postage Stamp 33 cents
1 LB of Bacon $2.59
Ground Coffee per IB $3.41
Loaf of Bread $1.49
Dozen Eggs 89 cents
That's why when this market crashes, commodities are going with it. Just like 2008.
Well, 'oil commodity' for sure, that crap is so fake hell 10 years ago oil was $20 a barrel and gas was $1.20...now $100 bbl and $4 is suddenly the new normal? People can do without gasoline, or at least way less, but cant do without food and that is all going up due to REAL shortage.
Repeat after me: 10 calories of fossil fuel to produce 1 calorie of food.
In the medium term, ALL commodities will go lower after the current crack-up boom is finished starving the 3rd world.
Don't worry.
We can ship all this gasoline to China and India, and they'll pay a premium for it.
There are no distortions in this perfectly harmonized, balanced global economy.
China and India are strong.
The U.S. is recovering.
Bernanke is brilliant.
/sarc
As an Aside, NFLX is being ramped even as equities generally look flacid right now...Just like the gas spike - somebody's out there on OFFENSE to smash weak-kneed shorts
If the price of the netflix increases, are they going to charge more to the netflix customers?
Comcast will rape you in Mpls with bandwidth controls coming..
Electric cars bitcehezz
Kinda makes you question the timing of the Wikiopps release of Saudi reserves yesterday hu ?
I "was" all for the Wiki thingy when it first came on-line, but now i think this may be a Psych-opps set-up for the sheeple.
By the way where is that banking hard drive we were supposed to see. ?
Maybe St. Julian will tie all this together with a leaked report on why cream corn gives you gas.
Hey Tyler, goose the natgas price. Talk about weather or frakking bans or something. I am all margined up again. I cant help myself. Margin is trader crack. Kids dont go down that path and become a junkie like me. Turn your lives around while you still can
'Pop' goes the recovery...no one has the money for the ultimate consumer commodity, gasoline. If they ain't driving to work, they sure as Hades ain't driving to the mall. Forget the price of gas...methinks the economy is running on fumes.
Two and a half years and 5 trillion dollars, and our brave new world leaders are talking about the tepid recovery. I don't know about "fumes." I think the fire is actually out.
When you're out of a job, and have stopped looking after two years, the only place you have to drive is the grocery store and back.
Depression economics. If you don't have any cash, you can't have any gas. It really is a simple equation
Why would we want to have logic bother our supreme leaders?
LOL.
Go ahead and try to raise gasoline to $4/gallon and see what happens. We've seen this film. Around here SUVs have been disappearing and have been replaced by Priuses. Gasoline demand cut by 2/3 in a flash.
This isn't the 1970s. We aren't stuck with American gas guzzlers this time.
I dont see THAT many Pruis's around, 1 out of 1,000 cars here? That is not making the difference, no way. I think the demand equation is as simple as way fewer people have jobs, those that do have them feel the pinch in all areas and are cutting back.
1 bad side effect to this economic BS (for the FED) is that people have seen they can do with less, and actually its better! Instead of filling their days with credit card shopping trips or other needless things they stay home with family.
You clearly don't live with the Gaia worshippers in Washington. Every other car is a Prius on GW parkway.
Apparently the refiners have it all wrong. They should be sending gasoline to the emerging markets because that is where the inflation causing demand is coming from. According to Mr. Bernake anyway.
"http://gregor.us/oecd/punk-us-oil-demand-and-export-confusion/
"The US is using spare refining capacity to export millions of barrels of oil products, while US domestic demand remains weak. One of the more common misunderstandings I see in energy circles right now is the idea that US oil demand has rebounded strongly since 2008. It hasn’t. The explanation can be found in the widening divergence between oil that’s imported for domestic usage, and oil that’s imported to convert into oil products for export."
gregor is the real deal, he knows his shit, one of my must read blogs.
No wonder retail stocks like WSM, JWN, JCP are screaming today.
Another "Peak Oil" scare staved off???
This you can definitely blame on the snow, lol.
Further proof that the wikileaks freak is just a US government disinformation tool.
These bstds have done this my entire life.
Before PEAK anything was a word.
We sloshed around in it for decades, every time we were told a shortage caused increases, they were no shortages.
When we were in lines, and odd and even days for fuel, there were no shortages, we were guinea pigs, used by our own fktatrd govt,SOBS.
Like Lab rats.
Now, we have record shattering prices,on lower demand, and the largest surplus of gasoline in 20 yrs.
This is where Govt comes in.,this is their job, not screwing with gun laws, ans where we should shit, and third hand smoke from a mile away.
Assholes, all of them are assholes.
For some great laughs, check out the archive of "projections" for oil prices for the last 28 years at the U.S. Energy Administration's web site. I wonder if anyone actually uses these projections?
http://tonto.eia.doe.gov/emeu/steo/pub/outlook.html
The basic mechanism of price discovery based on supply and demand has been terminally infected by the virus of speculation.
The primary thing driving up commodity prices worldwide are speculators armed with cheap money provided by central bankers and super fast computers. This is causing a havoc in the lives of rest of the population and pushing them towards poverty as they can no longer afford the basic necessities of life.
Regulators are either hand in glove with the banksters or are too slow to react and take ages to identify and take measures to solve the problems.
Total ban on speculation and the reinforcement of Glass Steagall Act is strictly required to bring relief to the man on the street.
http://www.marketoracle.co.uk/Article24581.html
So, according to your proposed solutions there will be NO relief to the man on the street.
Lots of wheel spinning about what's wrong, but no forthcoming relief.
the manipulation of Brent/ WTI in full swing. Arb now touches $14- . WTI is 15% cheaper than Brent -hope the European regulators are looking into this. Are any of the Oilsters moving US crude to Euroland ?
imho that's pure manipulation example aimed to please us public and try to dump future oil shocks for american consumers ... watch out inventories at their peak - than will start mid east rumble and than after when inventories deplete - suddenly wti will go down extending spread with brent ... than buy inventories and again again ... until oil comes close to ... i dnot know ... probably 400usd
that will soak up thin air printed fiat and destroy worlwide assets which will than be cheap to buy.
who gives a fuck about euro consumers (us have to drive to malls to consume) ... they should buy bicycles ... and run NG busses + RES
It's fucking 16 degrees here in Rochester, NY and I'm itching to get on my 12-speed bicycle. Muscled up shoveling snow, but need three weeks of pedaling to get the legs in proper shape for golf and tennis.
Business is strong - a dealer's market in what I broker - Poor schmucks have collections to sell, I buy and sell to rich fucks with nothing to do with their money.
I rent a house to a HUGELY FAT couple on food stamps, a Wal-Mart job and disability checks. They have two cars, two dogs, two cats and two fucking huge stomachs. I will stomp their money into my bank account monthly, the fat pig slaves of the government free-for-all.
Oil should be no more then $35 per barrel. Gas $1.25. Fuck the fat assed executives of XOM, CRevron, BP, and the sheeple who drive 20-40 miles just to get to a no end job.
Work-from-home will accelerate the decline of the government-business ponzi fascism in a rapid fashion, after they jack the prices because of lower demand.
And that banking reform - oh, thank you Chris Dodd-ing off and Barney Faggrank. Just got an offer in the mail from Premier Bank for a credit card - I'm pre-approved!
This is what I call REFORM, brothers. I kid you not. A $700 credit limit, with a mere $175 annual fee and a mnthly servicing fee of just $14.50 per month ($174.00 per year), and the low, low interest rate of 35.9% for purchases or cash advances.
Oh, Happy Days! My prayers have been answered!!!
Ya they reformed the hell ouf of those credit card companies didn't they.
its the fat US population that need to get on the cycles
Nah actually the 'fat' are the ones living on SNAP cards, you see them in the store with their 4 carts full whipping out the gubment credit card, while youre there at the day old bread rack. Cut off govt subsidies, cure obesity.
Yeah I had some disabilty fucker come into the public clinic office one day and he complained about the coffee he was offered. I wanted to rip the fucker's head off and shit in the new hole, cuz i drink that same damn coffee but it wasnt good enough for him.
No jobs, no money, few trips to the store, fewer trips to see Grandma, no vacation trips. Gas prices to $4.00+/ gal.... rally ON!
now $15 some one getting f***ed.
I'm putting on a convergence trade with cocoa and natural gas. Odd pair, I know. I am getting bored here at work. Waiting for psdv to pop is like watching the fucking grass grow.
$16 before the close ?