Gasoline Demand -- October 5, 2022

Before we get started, so it's not lost in all the clutter, the amount of oil in the US measured in days of supply, link here: 26.8 days; down from 26.9 days last week.

• this is pretty much the "goldilocks" number
• at 21 days and trending down, it would be concerning for the American consumer;
• at 30+ days and trending up, it would be concerning for oil traders and investors;

Bottom line: Warren Buffett is likely very happy with all the data coming out today and all the geo-political news coming out of the Mideast, Ukraine, and Washington, DC.

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Gasoline Demand

Now back to gasoline demand.

Link here.

Graph B: the original graphic without any comment.

Graph A: with comments --

• back during the summer the EIA delayed posting some of the weekly data, citing technical difficulties without any further explanation;
• the data posted at that time seemed a bit unusual, giving rise to analysts doubting the veracity of the EIA
• over the past ten days or so, the EIA has been revising their data and re-posting it; some revisions are incredibly large according to some analysts, again raising questions about the original data;
• bottom line: it's hard to believe that gasoline demand is surging in September / October, after peak driving season has ended;
• in addition, the rate of increase in gasoline demand is quite remarkable, especially considering this is coming after peak driving season
• it is true that the price of gasoline has come down and that might drive some gasoline demand, but it is curious.

Graph A, additional comments:

• the line graph is the four-week average;
• the weekly data is posted at the bottom, left-hand corner of the graphic
• note the trend, data in millions of barrels
• most recent week: 9.465 which exceeds the year-ago demand (9.427)
• previous week: 8.825
• week before : 8.322
• so, the weekly demand is increasing, which suggests next week's four-week average will also show another increase in gasoline demand

So, gasoline demand is increasing:

• at an unusual time of the year;
• just as OPEC+ decides to cut production by two million bopd; and,

Having said that, from my perspective, there is more than enough oil sloshing around to meet gasoline demand; the real story seems to be the tight distillate / diesel fuel situation.

It's hard to believe that this is not seen as bullish for oil investors and/or traders.