This page has been archived and commenting is disabled.
Well Thank God That At Least The Price Of Gasoline Is Under Control...
Following a barrage of letters from sellside "economists" who used the strawman of lower gasoline prices as the catalyst for either keeping their Q3/4 GDP projections, and in some cases even hiking them, we wonder: after looking at the chart below (which shows the price of NY gasoline), are we going to get some tiny, very modest retractions?
We doubt it. After all, the new strawman for GDP growth will be that Greece now has to tear down and rebuild its partially burned finance ministry. Just think of the externalities to a interlinked, globalized economy. One decrepit building in downtown Athens has to be worth at least 25 basis points to US GDP alone.
And most ironically, after destroying Morgan Stanley's rates desk in the past two weeks, the 30-5 breakeven compression trade is now set to make someone else rich. Alas, it will not be Morgan Stanley.
»
- 19887 reads
- Printer-friendly version
- Send to friend
- advertisements -
Oil always goes stale when they neglect blowing out the phone lines.
gas going up for the 4th of july weekend here in the states, that's probably what's going on
All this shit & avatar's on here is breaking me up.
Now that Obama has been in over two years, the wars have ended, the economy is booming, the deficit is under control, our foreign policy is respected worldwide, the Democrat Party has made solid gains nationally, people in America are coming together and the Middle East is calm.
Ha! Just kidding! None of that actually happened! Joke's on all of us!
Let's see, from the peak wholesale price a couple months ago to the recent low last week was a drop of 63cents a gallon RBOB at the NY hub right? After it had risen more than a buck and a half in the last year or so. So even then it was net 90 cents higher for the year. But, the spread between rack and retail (wholesale and retail) which for most of my life (b. May 1958) was under 30 cents a gallon is now routinely over $1 depending on where you live. While the wholesale dropped to $2.80 something a gallon, retail here went all the way down to $3.879 a gallon (as of yesterday).
A major part of this move in oil this week is that there was a decent sized draw on storage, and I suppose the market is pricing in the eventual replacement for SPR oil given to our buds in Italy. There was also a draw down on gasoline, but what most people don't know unless they read the whole report is that there was also a drop in demand...
"Despite the strong level of refinery inputs, gasoline production fell substantially in the week to 9.1 million barrels per day vs 9.5 million in the prior week to more than offset the weak demand and make for a 1.4 million barrel draw in gasoline to 213.2 million. Distillate stocks rose 0.3 million barrels to 142.3 million."
Simple, if you see demand dropping you slow down production even more so that prices have to rise. We must never again see fuel looking cheap, that would not do at all. Refineries running at 88.1% capacity. Can do better, shoot for 85%.
http://www.nasdaq.com/markets/us-economic-calendar.aspx
How many US (esp. east Coast) refineries have shut down in the last five years?
Zero. The US has as many operational refineries today as it had in 2003, 149 of them (per the EIA).