What Recovery? Petroleum Deliveries Lowest Since September 2008; Weakest July Demand Since 1995

Tyler Durden's picture

While the Achilles heel to the endless "economic data" BS coming out of China may be its electric production and demand, both of which show a vastly different picture than what the Beijing politburo's very wide brush strokes paint, the US itself is not immune from indicators that confirm that anything the BEA dishes out should be taken with a grain of salt. One data set that we showed recently that paints a drastically different (read slowing) picture of the US economy which we noted recently is railcar loading of waste and scrap for the simple reason that "The more we demand, the more waste is generated by that production." Of course, the propaganda manipulation machinery only focuses on the "entrance" of production, and completely ignore the "exit." But an even far more important metric of the general health of the US economy may be none other than broad energy demand, in the form of petroleum deliveries and gasoline demand. If this is indeed the relevant metric to observe, then things are about to get far, far worse. As Dow Jones notes: "U.S. petroleum deliveries, a measure of demand, fell by 2.7% in July from a year earlier to the lowest level in any month since September 2008, the American Petroleum Institute, an industry group, said Friday." It gets worse: "Demand in the world's biggest oil consumer, at 18.062 million barrels a day, was the weakest for the month of July since 1995, the API said. Year-to-date demand is down 2.3% from the same period in 2011."

Did Americans forget to drive?

Demand for gasoline, the most widely used petroleum product, dropped 3.8% from a year earlier, to 8.624 million barrels a day, the lowest July level since 1997. Gasoline use in the heart of the peak summer driving season was 2.2% lower than in June. January-July gasoline demand averaged 1.1% below a year earlier, at 8.671 million barrels a day, the API said.

Oh well, maybe Americans just decided to take the peak driving period of the summer season off for some reason. Demand for other distillates would still be high... assuming the economy was chugging along. Yes. And no.

Kerosine-based jet fuel use fell 0.8% in July from a year ago, to 1.455 million barrels a day, while demand for heavy residual fuel, used in power plants and industrial burners, dropped 7.1% year-on-year, to 294,000 barrels a day.

One would think that with collapsing demand, for whatever reason, the production side would slide as well, especially since the price of WTI is soaring and is back to just shy of $100, causing the Margin Hiker-in-Chief to grumble. One would be wrong.

Production of all four major products--gasoline, distillate, jet fuel and residual fuel--was greater than demand for those products. As a result, petroleum imports decreased and exports increased. Total imports of crude and refined products fell by 9.6% to average 10.4 million barrels a day in July. Exports of refined products increased 11.1% to a record high for July of 3.244 million barrels a day, and year-to-date exports were up 14% compared with the same period in 2011.

 

Refineries operated at 92.7% of capacity in July, the second month in a row above 90%.

 

Crude oil production rose 13.6% year on year in July to 6.225 million barrels a day, the highest July level since 1998. Year-to-date output averaged near the July level and was up 11.9% from the same period in 2011.

But, how is it possible than in light of collapsing demand in the world's marginal consumer of gasoline, that crude prices are not only flat, but have in fact entered a bull market in the past 3 months? Simple: we wrote about it in "Monti's bluffing unleashes bull market in crude."

What was the bluffing? Simple - that no matter what happens, Draghi will print. At least now we know who all those 'evil speculators' are that Obama bashes every time unleaded approaches $4.00 and Brent reaches fresh record highs in EUR terms. Such as now.

As for what all this means for the economy, the API chief economists summarizes it best.

"While retail sales for July are up and housing has improved, the weak petroleum demand numbers are a strong indication the economy is still faltering," said John Felmy, API chief economist. "Unfortunately, achieving robust growth will likely continue to be an uphill climb given the nation's fiscal challenges, business uncertainty, and a European economy in jeopardy of sliding back into recession."

It also means fresh all time highs in the S&P. Why? Because.

From API:

 

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
malikai's picture

Depression, bitchez.

AlaricBalth's picture

Anyone tell me WTF just happened to EUR/USD. Just got ripped by an algo?

Don't mean to jack the thread.

greyghost's picture

and yet the price of crude is up again today. so much for economics 101. where is the margin raiser in chief when when need him? just more of the special people playing games with food/fuel on phony markets. nimrods on here all day talking about manipulation of metals markets and not a word about fuel or food manipulation....ho hum

AGuy's picture

"and yet the price of crude is up again today."

On Israel/Iran War fears. SA told its citizens to leave. Isrealis grow concerned that war is near. AmadinnerJacket says Israel will be destroyed soon.

On Metals, The SA miner massacre drop up Platinum and Palladium prices today.

Tippoo Sultan's picture

No, Americans did not forget to drive; they simply have no jobs TO which to drive.

ersatzteil's picture

For sure, moving to Mexico and commuting to SD looks better every month...

The Monkey's picture

What is funny (sad funny, but humorous nonetheless)?

Prices keep climbing!

There have to be a lot of ubber bulls out there that both believe the recovery story, and that laugh loudly with each tick the stock market makes to the upside.

Did anyone tell these fellas that we all follow the cardinal rule?

"Never short in front of the central banks."

BWAAAHAAAHAAA!!!!!!!!

GetZeeGold's picture

 

 

It doesn't help to release strategic reserves if we don't have the refining resources to process it......but nice try anyways fellas.

 

Reporting from the land of Oz........we're gone bye bye. Our next report will be from Wonderland....peace out.

 

 

NidStyles's picture

It's called Inflation moron. The manipulation is pushing gold and silver down. Oil is high because of that Inflation.

aint no fortunate son's picture

I'm sure there's a good non-economic reason for the lower usage figures - people are probably just getting better gas mileage on their air conditioners this year, and using their bicycles more, we being such a fitness-conscious, svelte population these days - what else could it be?

Headbanger's picture

Why alll those electric cars I see everywhere now!

aint no fortunate son's picture

Well, they're easy to see - just follow the smoke and flames

malikai's picture

Just the normal Friday shenannigns: http://www.quantsig.net/img/fx_eurusd.png

EDIT: Some European FX shops just closed and the pop was probably related to them.

TruthInSunshine's picture

It's the 'AAPL Recovery.'

People are selling their EBT credits for 30 cents on the dollar and peddling stolen Tide detergent to raise cash to buy that iPad or iPhone.

Who needs a car when all one's life aspirations can be fulfilled via a 3.5" or 9.7" screen, whether posting to Facef*ck, playing Angry Birds or surfing porn?

 

Idiocracy - Carl's Jr Vending Machine (Extra Big Ass Fries)
JohnKozac's picture

I'm sorry truth, could you pls repeat that. I was busy Teeting my friend asking what she is doing now and also updating my FB page while watching Kim Kardashian's new line of clothes at Sears on the Tele.

papaswamp's picture

I want to get in on 'teeting'....

SmallerGovNow2's picture

LOL Truth, spit out my coffee...

infinity8's picture

Sorry but, they're raising cash to buy METH.

max2205's picture

Depression, bitchez.""

 

Priced in....

GetZeeGold's picture

 

 

Damn.....now I'm depressed.

 

Can't Obama just channel Calvin Coolidge from the 20s and fix this crap. I realize it goes against his marxist tendencies...but it's the only thing I see that's gonna work.

 

Withdrawn Sanction's picture

Depression indeed.

Another data point:  sales tax receipts are supposedly off 40% YOY in California.  Certainly some of that is due to increased web over brick and mortar shopping, but it seems unlikely to explain all of it.  

TBT or not TBT's picture

Garage sales are probably up out here.   You tend to do that when sizing up the u-haul you'll need for the move to less sclerotic, less expensive, less crime ridden climes.

Lewshine's picture

Any of you ever stop to think of how efficient this "perfect" rally we are experiencing,has evolved? The blatantcy and disregard of this last move is so disconnected from reality and so over the top that even CNBC continues to ask - WHY?? Ben and his boys had this one planned for a while. Ags and metals haven't run at all compared to equities. Even the move in bonds and oil don't justify the pretentious algo floor and constant upward momentum we see daily, since Draghi's remarks. We are being conditioned for something. They've got the computers torquing and tweeking almost every tradeable asset across the lexicon, carving out Ben's ideal legacy, by the minute. For me, it's just hard to swallow that this is all for bama's 2nd term - Gotta be something bigger than that.

 

 

Wild tree's picture

Lewshine,

Yes, it is bigger than fraudbama. Nothing less than the New World Order, that Nobama would love to be asked to head. Thus the apology tour, and he is now waiting. They all are. When everything dies, then the New World Order will be born. In the process, say goodbye to the old USA, get ready to welcome the USSA!!!!!!!!!!!

azzhatter's picture

Must be all those Volts GM is selling.

kaiserhoff's picture

Thanks, I'm going long extension cords;)

Seer's picture

Yeah, LONG extension cords are a must when we're talking Volts, don't want them parked too close to the house.

NEOSERF's picture

And in other news, fraud sticks its nose into just about every facet of US society, not 4 days after "Eddie Murray Day" in Baltimore where he got a statue, this scion of DC sports legends is hit with insider trading...beautiful, we need these types of things to complete our descent into the 5th level of banana-republicanism...

TBT or not TBT's picture

There are still Boy Scouts among us, but they're sidelined, or self-sidelined, or under a haze of licit anti-depressive medication, paid full price from their own pockets, with a prescription and everything.

MachoMan's picture

This eagle scout is busy playing world of tanks...  I guess that would be self-sidelined?

TBT or not TBT's picture

If you have access to a tank, one day you will be able to rise up, so there is that.

smlbizman's picture

yea...we got ed-die ed-die and doug decensie?...but corzine is good , timmy is good holder is good, obomber is good....look out martha they may come back for you....fuck these motherfucking cocksucking pieces of fucking garbage trash...

kaiserhoff's picture

Bicycles don't use much gas.  Half the dudes in Sleaze Beach got no ride, CAUSE THEY GOT NO LICENSE.

As the China Man say, no tickey, no laundy.

Be careful where you party.

Tsar Pointless's picture

Have I told you lately, this is bullish?

Have I told you, to fight the Fed is foolish?

He fills muppets up with gladness

Gives those who short equities sadness

By easing interest rates, that's what he'll do

TBT or not TBT's picture

NIRP!   NIRP!   NIRP!    NIRP!     All together now!

ZeroAvatar's picture

NIRP!  NIRO!  IROB!  ROBE!   OBEY!  OBEY!  OBEY!

CrashisOptimistic's picture

And yet the price . . . which remember hit its first spike summer of 2008 . . . before QE was even in the lexicon.  

Nothing to do with printing, sports fans.  If consumption falls and price rises, there is only one place to look.

Supply.

It's inadequate, and will become more so every single day.

In fact, wrap your minds around an obvious concept.  If you can't get it, you can't consume it.

 

adr's picture

What part of producing far more than what was consumed did you miss in that article?

There is no supply problem. The price is rising while production is outpacing consumption. Something that defies all rules of capitalism.

madcows's picture

supply and demand is irrelevant to price.  Price is what the dark pools determine it to be.

Anyway, the issue isn't price, it's deliveries.  Deliveries are down, b/c demand is down.  Gas stations order more gas when their tanks get low.

People aren't driving.  Companies aren't shipping.  The economy is collapsing.

TBT or not TBT's picture

Can we get a spoof of that sappy song "Reminiscing", substituting in "double dipping" instead?    I think we can pull that off, because we have lots of smart people doing nothing else.

TheFourthStooge-ing's picture

.

Can we get a spoof of that sappy song "Reminiscing", substituting in "double dipping" instead?

"The government is choomed,
the economy is doomed
and double dipping."

akak's picture

Or, for poster AnAnonymous(Asshole):

 

"We'll go stumbling in the dark
shitting in the park
and reminiscitizenizing."

TheFourthStooge-ing's picture

ROR!

"When he squats and takes a poo,
he breaks park rule number two.
Eternal nature."

http://www.shanghaidiaries.com/archives/IMG_9634.jpg

akak's picture

 

 

 

Friday night, it was late, I was walking you to the factory dormitory
We got onto a roadside --- Great! --- and I was dreaming of a shite
Would it turn out right
How to tell you gilr
I wanna build my one-child family around you
(Tibetan oppression is not true)
I wanna make you understand I'm talkin' about a mandatory Chinese Citizenism State-imposed plan ...

TheFourthStooge-ing's picture

FOOC ROR!

(farring out of chair, raughing out roud!)