Notes From All Over -- Explaining Gasoline To Brandon -- November 17, 2021

BREAKING: on a down day for the market, AAPL just popped. 

Weekly EIA petroleum report: link here. Another yawner.

• US crude oil inventories down 2.1 million bbls; still 7% below five-year average;
• imports unchanged week-over-week; absolutely in line with four-week average;
• refineries still operating well below 90% of their capacity;
• jet fuel supplied was up 44% but that's against the plague year; what is the data compared to 2019?

Shot across the bow: Amazon will no longer accept the VISA credit card in the UK.

Energy crisis, EU and UK:

• coal power plants are running at full tile in parts of Europe and enjoying a rare bout of profitability. Link here.
• oil pipeline from Russia to Europe closed "temporarily" for repair. Link here.

Apple: will now allow self-repair. Link here.

Autos: the big three -- Tesla, Rivian, Lucid. Link here.

Global warming: won't affect the well-being of humans. Period. Dot. IPCC. Link here.

$1.25-Tree: Dollar Tree raised all prices to $1.25. Link here.

The new reality: link here.

• Uber has no cars ...
• Airbnb has no real estate ...
• Rivian has no cars OR revenue.

BRIC: flashback to  2001. Link here. 

Let's go, Brandon. Let's investigate this: 

One day Algeria stops the gas pipeline via Morocco into Spain. Another day Germany say it needs more time to approve Nord Stream 2 gas pipeline. And another Belarus stops temporarily the Druzhba oil pipeline from Russia into Europe. All spontaneous; no politics involved, mind you.

Amazon: no one has this set in stock -- not even Lego -- but Amazon does. Link here.

Target blinks: will mimic Walmart -- will absorb costs; will not pass them on to consumers. Huge.

Final trades, Halftime Report: Paypal, Apple, Dick's Sporting Goods, Pfizer.

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Get Out The Popcorn

Brandon is using two "gasoline spreads" to try to make his case:

• the unfinished gasoline - finished gasoline spread
• finished gasoline -- gasoline at the pump spread

And, Brandon, of course, to keep it simple, combines it into one spread:

• the price of unfinished gasoline -- gasoline at the pump spread.

Today, his speech writers noted that the spread between the cost of unfinished gasoline and the price at the pump is widening. LOL. 

Explaining the jargon: the EIA at this link.

Econ 101:

• getting from unfinished gasoline to finished gasoline: value added (think potato chips: cost of the potato vs the wholesale price of potato chips)
• getting from finished gasoline to gasoline at the pump:  wholesale to retail (think potato chips: wholesale to retail)

This is not rocket science.

Let's tackle just one data point: getting from finished gasoline to gasoline at the pump.

What does that require.

Well, let's see what the EIA says at the linked article:

Blending terminals are more numerous and widely dispersed than petroleum refineries, and they have equipment for filling tanker trucks that transport finished motor gasoline to retail outlets.

Yup, there it is. Finished gasoline has to be trucked to the retail service station. What do we have right now? Yup, that's right. A trucking and a trucker shortage. 

This shouldn't be too hard to explain, even to an octagenarian. Perhaps two PowerPoint slides.

 But there's a much, much bigger story here.  

The fact that Brandon is dithering on this whole issue, taking no action except asking for an investigation, tells me one of two things is going on, and most likely it's a combination of the two.

First: he has no options to affect the price of gasoline in the near term (the holiday season).

Second: the Brandon administration has two competing factions. On the one hand, the ideologists love this, want the price of gasoline to spike, driving Americans to EVs and get off fossil fuels (not gonna happen); and, the realists who want Brandon to take real action, like opening the SPR, to bring down prices, even if it's only temporary. 

The fact that he is trying to bring down the price of gasoline with speeches and not taking tangible actions suggests he is dithering, unable to accept the recommendations of either of the factions in his White House.

Get out the popcorn.

Later, November 18, 2021, link here: the Reuters analyst questions who is advising Brandon ... to me it looks like debate between two parties in the White House --