Gasoline Inventories Jump To 20 Year High As Gas Price Surges

Tyler Durden's picture

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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jus_lite_reading's picture

That explains the job growth!

Calmyourself's picture

Also explains why oil is high, dollar is good as gold yes sir..

Michael's picture

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.

SheepDog-One's picture

Supply high, demand low, price surging....Bernankonomics! :D

101 years and counting's picture

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).


topcallingtroll's picture

They were talking about energy as a long term play versus short term speculation.

chumbawamba's picture

Cost-Push inflation will drive the price of energy up regardless of demand.  It's a dollar hedge.

I am Chumbawamba.

Sophist Economicus's picture

Yup, looks like last night's Oil's thread about supply, demand and speculation has more legs...


Let the JUNKing begin

willien1derland's picture

+1 - Great idea for a T-shirt SD1 --> You should joint venture the tshirt idea with WB7

Hephasteus's picture

Damnit. I picked the wrong year to give up arson.

Miles Kendig's picture

Then I suppose you won't mind if I get that book of matches from yaz...

HelluvaEngineer's picture

Next leg down in 3...2...1

Flakmeister's picture

Why is diesel so damn expensive? Could it be that gasoline demand no longer drives the price of oil?

jus_lite_reading's picture

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!

pan-the-ist's picture

And we can't use trains... that would put too many teamsters out of work.

Vaccaro's picture

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.

Flakmeister's picture

 It was a rhetorical question....

oogs66's picture

It will take about 10 minutes for someone to spin it as building a strategic reserve.  Government all good.

scatterbrains's picture

any cds on refinery fire insurance co.'s out there ?

RockyRacoon's picture

And I like your... never mind.

Cdad's picture

Broken, fake supply/demand economy....bitchez!

Priced for stupid...bitchez!

lsbumblebee's picture

Maybe if we turn that corn into ethanol it will all make sense.

Ragnarok's picture

+ limit up, we need more distillates!

tmosley's picture

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%?

Flakmeister's picture

 Hard to breakdown all the components, but this is certainly part of  it.

buzzsaw99's picture

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..

ssp2s's picture


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.

SheepDog-One's picture

Well personally Id like some global warming. Im about sick of this -20 where we normally have +30 average this time of year.

Calmyourself's picture

quit yer bitchin..   -40 windchill here, ha sucks don't it.. I am done with winter..

Flakmeister's picture

  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.

Flakmeister's picture

   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...

buzzsaw99's picture

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.

Flakmeister's picture

  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.

Flakmeister's picture

Lots of opinions on NG, it's a complex beast.

CHK selling their Haynesville properties

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.

tmosley's picture

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.  

Flakmeister's picture

  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.

topcallingtroll's picture

Go long ung! Margin up bitchez! Get out at 5.85

Flakmeister's picture

There is a difference between wealth management and speculation... Hey, fill your boots, hope it works out.

buzzsaw99's picture

Data is pretty noisy, hard to draw conclusion on a mom basis...


topcallingtroll's picture

No no no. Go long ung and margin up. Get out at 5.85 in the next week.

Jason T's picture

peak oil?  how about peak gas!  that's a stunning drop .. I don't know what to make of it though.

buzzsaw99's picture

If it were due to peak gasoline then inventories would be low.

Dr. Engali's picture

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.....

SheepDog-One's picture

YES spring is coming...and all the bankrupt unemployed americans will start their 'driving season'...awesome!

Calmyourself's picture

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??