Comparison of Inflation in selected countries- April, 2024 Edition

With the United Kingdom, Canada and EUstats release of March data, I have updated my comparison graph. [Note, the USA(EU method) is directly from Eurostat.]

As always, here is a snapshot of early inflation or transitory, until it turned in to everybody's problem.

To rehash, the U.S. transitory inflation was a product of massive stimulus and a snarled global supply chain. Retailers in a desperate bid to restock, inflated shipping container prices, shipping costs, etc. Which did lead to pressures globally. 

Then came the energy crunch, which really impacted globally... for awhile.

Inflation seems to be steadying across the board. The expectations for a continuing slowing... is up in the air. 

Comparison of Inflation in selected countries- March, 2024 Edition

With the United Kingdom, Canada and EUstats release of February data, I have updated my comparison graph. [Note, the USA(EU method) is directly from Eurostat.]

The rates are aligning in a narrow band across this spectrum.

However, it was NOT always the same, and the reasons for that are different, despite the gullible people fawning over, and blindly following their particular political puppeteer.

This is from the "beginning".

I will not bore you with the whys, but a quick look at some important issues...

Another month in the bag, with inflation seemingly slowing on an annual rate, but generally speaking, the month over month rate, when annualized... is well above the annual rate. More work to do?

Comparison of Inflation in selected countries- February, 2024 Edition

With the United Kingdom, Canada and EUstats release of December data, I have updated my comparison graph. [Note, the USA(EU method) is directly from Eurostat.]

The rates are indeed about the same across this spectrum.

However, it was NOT always the same, and the reasons for that are different, despite the gullible people fawning over, and blindly following their particular political puppeteer.

Done for this month.

Comparison of Inflation in selected countries- January, 2024 Edition

With the United Kingdom, Canada and EUstats release of December data, I have updated my comparison graph. [Note, the USA(EU method) is directly from Eurostat.]

A slight upward tick on the annual figures... across the board. I would expect some easing, once the January data comes forward.

For the silly ninnies that forget history, attempt to revise history, or are so gullible to be misled by their dear leaders...

Long before inflation was everywhere, the phrase was transitory. Yes Virginia, the USA led that "transitory" inflation, until the rest of the world started catching up. 

The chart is quite "busy", but the timeline is quite accurate. 

'nuff said!

Comparison of Inflation in selected countries- December, 2023 Edition

With the United Kingdom, Canada and EUstats release of November data, I have updated my comparison graph. [Note, the USA(EU method) is directly from Eurostat.]

For those individuals unable to think on their own and unable to question their masters, here is a timeline in rebuttal to the everyone has inflation. Look at the above chart to consider the timeline and now look at the below chart...

The EU method of calculating inflation is used, to better gain an apples to apples comparison. Yes, that line on top is U.S. inflation running well ahead of the EU and UK, or (sadly) what the your masters consider the rest of the world in U.S. political speak.

Geez!!!

Comparison of Inflation in selected countries- November, 2023 Edition

With the United Kingdom, Canada and EUstats release of October data, I have updated my comparison graph. [Note, the USA(EU method) is directly from Eurostat.]

Comparison of Inflation in selected countries- September, 2023 Edition

With the United Kingdom, Canada and EUstats release of August data, I have updated my comparison graph. [Note, the USA(EU method) is directly from Eurostat.]

The USA (CPI: +3.7%; +2.5% Eurostate method) and Canada +4.0%, ticked up for the 2nd consecutive month, with regards to year over year inflation. 

The EU has marked 10 consecutive months of decline in year over year inflation at 5.9%. That figure was down from 6.1% last month. It was not even across the board, as Germany's 6.5% of last month, dipped to 6.4%, which was improvement, but some countries... such as France increased from 5.1% to 5.7%, according to Eurostat.

The UK has now marked its 3rd consecutive decline at 6.3%, with the month over month at +0.4%, which was up from previous 2 months.

Comparison of Inflation in selected countries- August, 2023 Edition

With the United Kingdom, Canada and EUstats release of July data, I have updated my comparison graph...

Note, the USA(EU method) is directly from Eurostats. Once upon a time, the UK was also included. I guess somebody's nose got out of joint for some reason. 😈

In any case, there is some moderation with inflation in Europe and the UK, with the U.S. and Canada having a slight uptick... largely due to core inflation, but set to accelerate with energy prices now rising. Including in Europe and the UK.

Here is hoping for a mild winter, with no strikes and stable pricing going forward. 

Is that too much to ask for?

Comparison of Inflation in selected countries- July, 2023 Edition

With the United Kingdom EUstats release of June data, I have updated my comparison graph...

Note, the USA(EU method) is directly from Eurostats.

The rate of inflation is decelerating across the board. However, the near 19%+ rise in prices, over the past 26 months is still fresh in the minds of most consumers.

There are some naysayers worried about the rapid deceleration, as sign of either a recession or possible deflation.

This seems to be based on the notion of this deceleration never happening before. Not so sure about that, as it has occurred in the past 80 years, and not always accompanied by a recession. Granted, monetary policy has been a factor, but again... such recessions were most often deemed as mild. 

But what do I know?

Comparison of Inflation in selected countries

 

Stats Canada reported their y/y inflation numbers this morning, so here goes with a graph... since January, 2020.

Some folks might prefer a chart, so here it is... as well.

Included in both is the United States inflation by way of using the EU methodology. The overall picture indicates much improvement in y/y figures, although the United Kingdom seems to be stalled. 

As for the United States, the rate of y/y inflation appears set to fall further, but a considerable part of the drop is due to lower energy costs. With June, 2022 being the peak of gasoline costs, and a rapid fall back to near current levels in September, 2022... the benefit of y/y inflation reduction will quickly recede. 

The focus will become core + food, imho. 

Where do we stand on Natural Gas and European Inflation.

Are we looking at the wrong stats to determine whether we will have a recession in the U.S.? Slowly, concern for China's economy has edged into the picture, but not much is being said about Europe. 

Frankly, I don't see how Europe can avoid a recession and I wonder how that will impact the U.S. It is clear for all to see, the impact of natural gas will have on Europe. These aren't small numbers.

When you hear reports of the U.K. raising the cap to £4,200 annual, it might be overlooked that in early summer of last year... it was about £1,200 annual. Currently the cap is about £2,000 annual. Here is the latest futures, converted to USD...

click to enlarge

Inflation in Europe is edging up, even while the governments are trying to keep a lid on the natural gas impact to consumers. 

click to enlarge

Maybe a chart would be better...

click to enlarge

Generally speaking and from I can glean... the German natural gas storage is 78% of capacity, with a goal of 90%... just to get through this winter and then the cycle continues. The U.K. is near capacity and is using its LNG facilities to export to Europe. As winter nears the expectation is for U.K. prices to soar to that £4,200 annual.

Considering that not long ago, Asia was the recipient of one half of LNG. They are being subjected to very high LNG prices as well.

The U.S. is not immune to upward natural gas prices, but not to the extent of Europe. The recent CPI report seems to have somewhat mirrored the ebb and flow of Nat/Gas prices, but the ebb may be over, as the flow via LNG, is set to restart with Freeport and where there is money to be made... more facilities will come on line. Drawing against U.S. reserves. 

It was Freeport going off line, which created the dip, as the draw on reserves slowed.

click to enlarge
https://www.eia.gov/naturalgas/weekly/#tabs-prices-3

While this chart indicates some slipping in July, due to Freeport being offline, the current NatGas price is about $9 and expected to continue climbing as LNG exports pick up. While Freeport is not slated to come back on line until an October restart... the draw has begun.

Month to Month
click to enlarge

That July drop will reverse in August.

And it should not go unnoticed... electricity prices have been on a steady upward swing, which with about 40% of our electricity coming from natural gas generation. Winter is nigh upon us. Gasoline may be ebbing (?), but the rest of the overlooked energy index is not, and it will likely be overlooked until those heating bills come into play.

We have gotten rather used to cheap natural gas and those days are in the rear view mirror, imo. So what are natural gas stocks for the U.S. compared to last year.

click to enlarge
https://www.eia.gov/naturalgas/weekly/

3375Bcf last year to 2519Bcf this year, or down 25.3%. Certainly within the 5 year average, but only 119Bcf above the minimum.

Let's hope for a very mild winter.

Even A Broken Clock is Right Twice a Day!!

In this digital age, there will be many that do not understand a reference from way back in the age of analog clocks. But on to the meat of the matter, or where’s the beef?

After months of American citizens complaining about inflation, certain politicians have determined it is a problem and are focused upon the problem. We should also understand the “rest” of the world is also experiencing inflation.

Except there was rarely a peep, until the “rest” of the world caught up with the U.S.A.

Here is a nice graph with annual inflation rates since August 2021. (Click on Picture for larger view).

Eurostat is the source for the EU, France, Germany, as well as the harmonized inflation rate of the U.S. Oddly the U.S. is not in the EU and is tracked, yet U.K. no longer appears anywhere. Someone is taking Brexit very seriously, imo. The U.K. is represented by its own Office of National Statistics, which has both HCIP and CPI. Then Canada data is taken from Statistics Canada. (I estimated the Eurostat numbers for the U.S. at 9.1%, but put 8.8% on this chart/graph to be safe on the low side).

Here is a chart as well...

There does seem to be inflation in these countries, but they are just now joining the inflation party, we have been experiencing for several months. As they say… numbers don’t lie, but politicians do. In this case, our politicians may not be lying, but have put off telling the truth until it could be spun as impacting a lot of countries. 

Clearly, we can see the impact of the natural gas pricing in the EU and UK, as well as the impact of the Ukraine invasion, for all including Canada. The U.S. can certainly join in the chorus blaming Putin, but what about the earlier periods, when both the EU and the UK were experiencing less inflation than the United States?

Why wasn’t inflation an issue then? Did our politicians need to wait for someone else to blame and then proclaim it's not my fault, everyone is having high inflation?

Hey, it will probably work... given the short attention span of most Americans. 

Would Keystone XL Have Helped?

That seems to be all the rage, now with gasoline prices topping the US $5 mark. It seems that everyone can agree, that it is the fault of one political party or the other. So it would seem that allowing the Keystone XL pipeline to be built... would have increased the volume of crude coming into the United States and thereby reduce the price of gasoline.

Except we are exporting crude and petroleum products at an enormous and historical rate. We have exported 920,255,000 barrels of oil and petroleum products since the beginning of March. Certainly we have imported a lot as well. 827,071,000 barrels of oil and petroleum products in that same period. Oh wait... that export number is nearly 100 million barrels higher than the import number.

What would the crude inventory look like... Note the gray area is the 5 year range, both top and bottom, with the blue line being where we actually are and the red line being those 100 million barrels. Note the 5 year is distorted by the sudden drop in consumer demand, due to covid, which would normally be in the 420 million barrel range. Even the past 5 years is distorted in comparison to 7 years ago. (If you struggle with the small print, just click on the image. 

It gets even better as we have exported 86,667,000 barrels of gasoline over that same period, while importing 74,508,000 barrels of gasoline. Oops!

This is why I am having a problem with the idea surrounding the failure to approve Keystone XL as having an impact on our current gasoline prices. 

To be sure, IF we could go back in time and retroactively approve Keystone XL it should reduce the global impact of crude and thereby the price of gasoline, IF everything else remained the same.

To do that, we would need to ignore the shale boom (drill baby drill) and our own Congress in December, 2015, lifted the oil export ban that had been in place for over 40 years and let's not forget the releases of the Strategic Petroleum Reserve (SPR).

Briefly, the Keystone XL was proposed back in 2008, just as U.S. gasoline prices roared past the $4 per gallon mark. Keystone XL was a proposal by what was then called Trans Canada, based in Calgary. It was the 4th phase of the project, which came under fire. Politics in Canada prevents pipelines of this scale from going to their coasts, thus it is almost captive to the U.S. Market. 

It should be noted that XL was struck down in November, 2015.

Here is the gasoline price chart, with some embedded notes from me. (Pardon the penmanship)

Here is the U.S. Production chart without my adding comments, so refer to above dates and times... (Note that dates may not line up and I probably should have marked each)

So while we can blame Obama (Democrat) for the Keystone cancellation, it should be pointed out the repeal of the crude oil export ban... was Republican led. So here is what transpired, regarding exports from the USA.

Then finally, the last part of the picture... crude oil historical inventory.

At that point in time, the drill baby drill people were under severe financial stress and really needed to unload crude via exports. Keystone XL would have added pressure as well, although the XL stood for export limited, which seems like the exports would be limited, but in American terms, Keystone XL (export limited) would have been branded Keystone XI (export inc.) Keystone was a Canadian venture. Granted it was being exported to the USA, but intent was points further. 

And it was clear the aim was to link up to Cushing Oklahoma and the new pipelines being put in place to the gulf coast AND thereby be further exported to parts unknown. Pipelines that had moved crude from the gulf to the interior were being reversed, as part of this plan. Yes, the refiners in the Gulf had established Foreign Trade Zone status, thereby exempting the Canadian crude from export ban. It was a pass through arrangement being planned.

Keystone XL was slated to add 850,000 barrels per day into the mix. Yes, it would have theoretically lowered global petroleum prices, but so would the release of 1,000,000 barrels a day from the SPR. Coupled together, the likelihood was prices being about the same as current, as the need to phase out Russian Crude would be pulled forward.

Just because XL was struck down, does not mean their crude is not making its way to the gulf and the U.S. refineries along the gulf. Remember all the problems with rail tanker explosions and fires? The result was new tanker requirements and the biggest makers of these new tankers were subsidiaries of Burlington Northern, which was owned by Berkshire Hathaway. A lot of money to be made by building these new rail tankers and hauling this crude. It would have been cheaper by pipeline, but politics is politics.

Striking down XL doesn't appear to have staunched the flow of crude oil from Canada...

Then there is this... 

CALGARY, Alberta, March 24 (Reuters) - Canada has capacity to increase oil and gas exports by up to 300,000 barrels per day (bpd) by the end of 2022 to help improve global energy security following Russia's invasion of Ukraine, Natural Resources Minister Jonathan Wilkinson on Thursday.

It would seem that existing flows were not at capacity, so how would XL have increased the flows?

I can't really see a way around the current price of gasoline at the pump. We may have seen prices lower than 1 year ago and may see prices come down quicker in the fall... but right now, it would likely be the same. 

As usual, there is plenty of blame to pass around and nothing will really be done to alleviate the rise in prices. 

Would Keystone XL have helped? ONLY IF  YOU BELIEVE NONE OF IT WOULD BE EXPORTED OR DISPLACE U.S. CRUDE TO BE EXPORTED. By the way, I have this beachfront property for sale in Death Valley... if you are interested.

If you feel the need to blame politicians, be sure to blame ALL, in my humble opinion. The finger prints of each party are all over the current situation.