Review of EIA Weekly Report for 7-13-2022

 

Is demand destruction taking place in the gasoline market? The weekly EIA report does seem to suggest it. A whopping jump in gasoline inventory from last week (+5.8MB), although not at last year's level. The consumption numbers would lead me to believe that someone may have stubbed their toe, when doing the math. Highly unlikely, so consumption dropped off considerably.

Crude inventories jumped 3.3MB and distillates up 2.7MB. Across those 3 we get 11.8MB of products. 

Oh wait, I forgot the imports/exports. We had been exporting roughly 1MB per day more than importing of all products. This week indicated we imported slightly more than exports. Since March, we have exported 124,597,000 barrels of Crude and Petroleum products, than we have imported. 

Gasoline, on the other hand... continues to exported more than imported. 17,500,000 barrels more since March.

It still puzzles me, as this report is for week ending July the 8th, which included the July 4th holiday. Apparently, most people stayed home at shot off fireworks. It seemed that way in my neighborhood and lasts for days on end. Seriously, July the 12th and still lighting them up. 

In any case, the gasoline pump prices are on the decline, although not falling as fast as they rose. Still can see gasoline falling to $4.10 regular for the national average. Probably won't get there this month, but in August... possibly. Of course, it could all change very quickly. 

I should mention the importance of the strong dollar. In an alternate universe, where the dollar was stable compared to last year, the price of WTI crude would be in the $115 range and not the current $96. Hooray for the strong dollar... until it begins to weaken, which it will. It's just when.

On to the Natural Gas futures...

I have no idea where Europe and the U.K. stands on their natural gas supplies, but the pricing indicates a lot of pain going forward. I can only think of the USA status and hope for the best.

It seems a long time ago, but once there was a saying... if the U.S. sneezes, the rest of the world catches cold. Times have changed and I suspect... if Europe sneezes, the rest of the world will catch a cold. Maybe not that extreme, but if Germany is E.U.'s engine and their exports have fallen dramatically, even with a weak Euro... then something is terribly amiss, in my humble opinion.