Peak Oil? What Peak Oil? This Is Absolutely Insane -- August 21, 2015

It's been almost a year since Saudi Arabia shocked "us" with the announcement they were putting pedal to the metal, maximizing production to maintain market share. That was back in October, 2014. By March, 2015, pretty much everything was being delayed or curtailed and yet the glut of oil continues.

How bad is this glut of oil? Look at these two data points from EIA and other sources via Jack Kemp:

• US refineries ran flat out over the summer (currently 95% capacity vs a 10-year average of 91%
• US crude oil stocks can supply refiners for 27 days right now, compared to 10-year average of 23 days

It wouldn't seem that a 91% average is a whole lot different than 98%+ (full capacity) but, apparently it is, and apparently, it's a big deal.

And despite running flat out, refiners apparently cannot keep up with demand. With a glut of oil and with refiners at full capacity one would think gasoline would be under $2.00/gallon here in Texas, but it's not quite there yet (all things being equal, gasoline will go under $2.00/gallon by Christmas in Texas). But oil is well above $2.00/gallon here in Texas suggesting there is huge gasoline demand, and in fact, that's what the data tells us. Based on a casual observation of highway building, commercial development, and new residential sites, the economy appears to be booming in north Texas.

It's very likely gasoline demand will hit an all-time record in the US before the end of August. The most recent data available: US gasoline demand for the second week in August hit 9.705 million bopd; the record, I believe, was set in the third week of August, 2007, at 9.762 million bopd.

Re-posting from yesterday: Gasoline demand (a dynamic link: for most recent week, up slightly to 9.705 million bopd. The four-week average is down slightly to 9.604 million bopd. It's going to be tough to get to 10 million bopd but it's going to be close. I think the record was the third week in August, 2007, at 9.762 million bopd. 

If one thinks about it, it is absolutely insane.
 
The Japanese are setting new records for gasoline shipments and yet the pundits tell us that the Chinese and the Japanese economies are stagnating.

Everywhere else, particularly in the US, the pundits tell us everything is hunky-dory. Reuters tells us week-after-week how strong the labor market is in the US based on declining first-time claims for unemployment benefits. And yesterday -- just yesterday, the AP reported that US home sales in July soared to the fastest pace since early 2007.

2007 must have been a good year; I don't remember: home sales set a record; and, gasoline demand set an all-time record. I forget who was president then but it must have been Clinton, Bush, or Obama.

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One Graph Worth A Thousand Energy Blogs