Note: this whole "gasoline demand" fascinated me. I learned a lot from it. Some folks are suggesting the EIA is "fudging" the "gasoline demand" figures. See ZeroHedge, August 4, 2022.
Folks are working too hard / over-thinking what's going. Once one realizes who's measuring what, it all makes sense. No conspiracy theories. Simply cash flow.
This page is simply for my benefit and for the archives.
Alex Kimani:
While Gasbuddy claims there was a 2% rise in gasoline demand last week, the EIA reported a 7.6% drop in demand.
Comment: they can both be correct; GasBuddy and EIA measuring two different things.
Updates
August 7, 2022: link here.
- WTI oil prices have given up nearly all their gains since Russia invaded Ukraine, falling roughly 9.5% over the course of the week amid fears oil demand is collapsing.
- Some oil pundits are now claiming that the Biden administration has been fabricating low gasoline demand data in order to drag prices lower (there are folks pushing the "conspiracy theory"; I don't buy it; I don't buy a "conspiracy" explanation).
- While
Gasbuddy claims there was a 2% rise in gasoline demand last week, the
EIA reported a 7.6% drop in demand (they can both be correct; GasBuddy
and EIA measuring two different things)
- I like Alex Kimani but he missed the target on this on, on a number of levels.
- I was disappointed there was really no analysis; no number-crunching to try to explain things
- look at the weekly data, million bbls/day
- 7/15/22: 8.541
- 7/22/22: 9.245
- 7/29/22: 8.521 (w/w= minus 7.8%; y/y = -12.8%
- one year ago, 7/31/21: 9.775
In the graphic above,
- EIA measures gasoline demand at "B":
- GasBuddy measures gasoline demand at "A."
The question is why the disparity. A little thinking will explain "the disconnect."
Original Post
We'll talk about this again later.
The interesting thing: nothing supports the suggestion that gasoline demand has fallen that much, except
the price of gasoline and crude oil have both come down significantly
in just the past few days. Although it's hard to say gasoline at $4.25
"has come down significantly."
Suggestion regarding previous post. As a reminder:
US gasoline demand.
With new annotation:
Suggestion:
Original Post
Gasoline demand: link here.
- then explain:
- gasoline under $4.00 / gallon and dropping fast;
- WTI below $90 and dropping fast;
- US refiners operating at a very low capacity; trending toward 90% of their operating capacity; lowest in the last few years;
***********************
For The Archives
Road trip.
Currently I am on the road:
my notes will be less frequent, perhaps shorter. I will not get to my
e-mail as often and I will not be able to post comments as often or in a
timely manner.
Thanks for making the inventory data more clear. Fuel in the storage tanks at gas stations is not counted by EPA. Gas station owners are likely running down inventory in time of decreasing fuel prices. Summer to winter gas changeover is September 15th, cost decrease around 15 cents a gallon for winter gas. Likely refineries are tuning to make winter fuel, takes some time from refining to delivery to gas stations. More butane is added to gasoline for winter grade fuel, under $2.00 a gallon.
ReplyDeleteYou are 1000% correct. It all makes sense when one realizes where EIA measures "demand" and where "GasBuddy" measures "demand."
DeleteSupporting that, there's no way that demand would change that much from week to week in July as measured by EIA unless it was the service stations ordering less as you noted.