Producer Price Index and some other opinions

The Producer Price Index was released this morning and indicated an upturn.

Note that I did not revise the December, 2024 final demand, as did the BLS. Yes, December was revised upward to 3.5%. https://www.bls.gov/news.release/archives/ppi_01142025.htm

The nervous nellies will scream inflation is roaring back. Maybe so, but it will not repeat the horrors of 2021~2022. How can I say that? Once you understand the causes, the answer becomes easy.

• After the covid shutdown and collapse of international trade, the shipping industry was in disarray, with containers to move goods... in all the wrong places.
• Retailers had significantly reduced inventories to meet the slowing demand.
• There was a rather large stimulus paid to American citizens, on top of some previous payouts.
• The covid vaccine was becoming rapidly available.
• The American people were told that it was now safe to resume normal activities.
• An impending west coast port strike for mid 2022, which did not materialize.

Newly freed from fear Americans started immediately spending that stimulus money, which boosted retail sales by 10% in the first month.  The retailers, started ramping up orders significantly to restock the shelves, which exposed the problems with the shipping containers. This was compounded by retailers, pulling orders well ahead to heavily stock up... prior to the threatened west coast port strike. 

The shipping industry has finally recovered, the retail inventories have reached stability, and there are no strike threats on the horizon. There was consideration of a possible port strike on the east coast and gulf, which did increase orders, as well as impending tariff expectations, which also increased orders. 

The port strike is in the rear view mirror and the shipping industry sailed through it easily. The tariff question is still to be answered.

As a further note on retail sales... when adjusted for inflation, they have remained at that March, 2021 level. That will likely be the indicator of future demand... or lack thereof. 

Tariffs would likely weaken demand, so the expectation of massive inflation due to tariffs... not so much.

A Few Reports and some opinions... of course!

The CPI came out today and now that Trump is in office, it has suddenly turned terrible. Nevermind, it is for January, so remarkable for just 11 days in office. /s

The media's memory is a bit wacky, with claims that it has suddenly shifted upward, even though the lowest annual rate since February 2021 was this past September.

A trip down memory lane...

The real earnings report has been ignored and for good reason... weekly wages, when adjusted for inflation have now fallen back to June, 2024 levels. That's seven months, since weekly wages adjusted for inflation have been this low.

Note: The BLS reports both CPI and Real Earnings.

As for the energy report from the EIA, not much in extreme changes. Pump prices will likely rise, but should be noted... still below year ago levels. Of course, the rise will become political, as everything else.

Tariffs... A lot of talk about the damaging effects of tariffs, but the whole matter of FTZ status of dozens of companies have been ignored. A FTZ or "Foreign Trade Zone" status, means a company pays no tariffs, until the end product is sold to the public. There are many large and small companies with FTZs, which include energy companies (refineries, etc.) and automobile companies with their component assemblies. 

Once you understand the magnitude of FTZs, then you should consider that tariffs have long been in existence. 

Another serious argument put forth by many... is the Smoot Hawley act devastated the U.S. Economy during the depression, or at least made it worse. Not sure correlation was causation for this period. It does give the trade aficionados a talking point.

Yes, tariffs will cause inflation. However, off shoring of goods was a primary reason for the erosion of the middle class in the U.S. We basically beat inflation, by utilizing cheap foreign labor. We cannot hope to restore the middle class, without reshoring. 

It really is that simple. 

This Week in Petroleum Summary December 27th, 2024 per EIA.GOV

This week's full report.  

Gasoline pump prices fell -1.6¢ for the week, but continues below year ago levels, by -8.8¢, or -2.88%. Days supply fell to 25.2. For perspective... last year was 25.7 days. 

Inventories were mixed , with crude down -4.2M barrels; Distillates down -1.7M barrels; Gasoline stocks rose +1.6M barrels. Total Petroleum + products +SPR slipped -12.4M barrels, with the SPR rising +260K barrels.

The total products is still +16.2M barrels ahead of year ago levels. 

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread fell from last week's $16.89, to $16.68. Gasoline rose to $7.74, from last week's $7.68. Distillates fell to $8.94, compared to last week's $9.22. Per barrel of diesel is $29.60; Per barrel of gasoline is $17.02. Generally speaking... above $25 indicates rises. 

The data sets for gasoline, continue to diverge with price movement in the coming days, within a narrow band, imo. -1.7¢ ~ +1.9¢. There does seem to be some upward movement in diesel.

With the profitability of diesel increasing, the potential for added refining could increase gasoline supplies, which has been shown of late. So it is possible that gasoline will continue somewhat lower, but diesel appears to be headed up. 

Time will tell.

I will continue to track the Energy Reports for personal reasons, I will discontinue publications of going forward]

This Week in Petroleum Summary December 18th, 2024 per EIA.GOV

This week's full report.  

Gasoline pump prices rose +1.4¢ for the week, but continues below year ago levels, by -3.2¢, or -1.2%. Days supply fell to 25.4. For perspective... last year was 26.5 days. 

Inventories were mixed , with crude down -934K barrels; Distillates down -3.2M barrels; Gasoline stocks rose +2.3M barrels. Total Petroleum + products +SPR slipped -2.7M barrels, with the SPR rising +519K barrels.

The total products is still +11.6M barrels ahead of year ago levels. 

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread fell from last week's $17.11, to $16.89. Gasoline fell to $7.67, from last week's $8.38. Distillates rose to $9.22, compared to last week's $8.72. Per barrel of diesel is $30.53; Per barrel of gasoline is $16.86. Generally speaking... above $25 indicates rises. 

The data sets for gasoline, continue to diverge with price movement in the coming days, within a narrow band, imo. -.02¢ ~ +4.2¢. There does seem to be some upward movement in diesel.

With the profitability of diesel increasing, the potential for added refining could increase gasoline supplies, which has been shown of late. So it is possible that gasoline will continue somewhat lower, but diesel appears to be headed up. 

Time will tell.

This Week in Petroleum Summary December 11th, 2024 per EIA.GOV

This week's full report.  

Gasoline pump prices slid -1.3¢ for the week, but continues below year ago levels, by -13.3¢, or -4.2%. Days supply rose to 25.5. For perspective... last year was 26.3 days. 

Inventories were mixed , with crude down -1.4M barrels; Distillates up +3.2M barrels; Gasoline stocks rose +5.1M barrels. Total Petroleum + products +SPR slipped -195K barrels, with the SPR rising +724K barrels.

The total products is still +17.7M barrels ahead of year ago levels.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread fell from last week's $17.41, to $17.11. Gasoline fell to $8.38, from last week's $8.73. Distillates slid to $8.72, compared to last week's $8.68.

The data sets for gasoline, continue to diverge with price movement in the coming days, within a narrow band, imo. -3.1¢ ~ +4.4¢. There does seem to be some upward movement in diesel.

We may be nearing the end of downward pressures on gasoline. Just have to wait and see.

This Week in Petroleum Summary December 4th, 2024 per EIA.GOV

This week's full report.  

Gasoline pump prices slid -0.4¢ for the week, but continues below year ago levels, by -20.9¢, or -6.4%. Days supply rose to 24.5. For perspective... last year was 26.2 days. 

Inventories were mixed , with crude down -5.1M barrels; Distillates up +3.4M barrels; Gasoline stocks rose +2.4M barrels. Total Petroleum + products +SPR slipped -3.3M barrels, with the SPR rising +1.4M barrels.

The total products is still +7.9M barrels ahead of year ago levels.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread fell from last week's $17.96, to $17.41. Gasoline fell to $8.73, from last week's $8.76. Distillates slid to $8.68, compared to last week's $9.21.

The data sets continue to diverge with price movement in the coming days, within a narrow band, imo. -2.4¢ ~ +3.6¢. 

Still, just as the past few weeks... nothing dramatic in the way of prices surging, or at least for now and should continue until the Christmas holiday, imo.

This Week in Petroleum Summary November 27th, 2024 per EIA.GOV

This week's full report.  

Gasoline pump prices rose +0.7¢ for the week, but continues below year ago levels, by -17.7¢, or -5.4%. Days supply rose to 24.2. For perspective... last year was 24.8 days. 

Inventories were mixed , with crude down -1.8M barrels; Distillates up +416K barrels; Gasoline stocks rose +3.3M barrels. Total Petroleum + products +SPR slipped -625K barrels, with the SPR rising +1.2M barrels.

The total products is still +9.8M barrels ahead of year ago levels.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread fell from last week's $18.64, to $17.96. Gasoline fell to $8.76, from last week's $9.46. Distillates rose to $9.21, compared to last week's $9.18.

The data sets continue to diverge with price movement in the coming days, within a narrow band, imo. -1.9¢ ~ +3.1¢. 

Still, just as the past few weeks... nothing dramatic in the way of prices surging, or at least for now and should continue until the Christmas holiday, imo.

This Week in Petroleum Summary November 20th, 2024 per EIA.GOV

This week's full report. 

Gasoline pump prices fell -1.8¢ for the week, and continues well below year ago levels, by -24.2¢, or -7.3%. Days supply rose to 23.4. For perspective... last year was 24.3 days. 

Inventories were mixed , with crude up +545K barrels; Distillates down -114K barrels; Gasoline stocks rose +2.1M barrels. Total Petroleum + products +SPR rose -4.4M barrels, with the SPR rising +1.4M barrels.

The total products is still +13.6M barrels ahead of year ago levels.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread rose from last week's $17.95, to $18.64. Gasoline rose to $9.46, from last week's $8.99. Distillates rose to $9.18, compared to last week's $8.96.

The data sets continue to diverge with price movement in the coming days, within a narrow band, imo. +2.3¢ ~ +3.6¢. Supposedly, this will be blamed on missiles in Ukraine, causing price of oil to move.

Still, just as the past few weeks... nothing dramatic in the way of prices surging, or at least for now and should continue until the Christmas holiday, imo.

This Week in Petroleum Summary November 15th, 2024 per EIA.GOV

This week's full report. 

Gasoline pump prices fell -1.5¢ for the week, and continues well below year ago levels, by -26.1¢, or -7.8%. Days supply slid to 22.9. For perspective... last year was 24.0 days.

Inventories were mixed , with crude up +2.1M barrels; Distillates down -199K barrels; Gasoline stocks fell -4.4M barrels. Total Petroleum + products +SPR slid -5.9M barrels, with the SPR rising +81K barrels.

The total products is still +13.6M barrels ahead of year ago levels.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread rose from last week's $17.00, to $17.95. Gasoline rose to $8.99, from last week's $8.44. Distillates rose to $8.96, compared to last week's $8.57.

The data sets continue to diverge with price movement in the coming days, within a narrow band, imo. -2.7¢ ~ +3.0¢.

Still, just as the past few weeks... nothing dramatic in the way of prices surging, or at least for now and should continue until the Christmas holiday, imo.

This Week in Petroleum Summary November 6th, 2024 per EIA.GOV

This week's full report. 

Gasoline pump prices fell -0.28¢ for the week, and continues well below year ago levels, by -31.1¢, or -9.1%. Days supply rosel to 23.8. For perspective... last year was 24.1 days.

Inventories were up across the board , with crude up +1.1M barrels; Distillates up +2.9M barrels; Gasoline stocks up +412K barrels. Total Petroleum + products +SPR rose +263K barrels, with the SPR rising +1.4M barrels.

The total products is still +19.5M barrels ahead of year ago levels.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread rose from last week's $16.62, to $17.00. Gasoline eased ever so slightly to $8.44, from last week's $8.45. Distillates rose to $8.57, compared to last week's $8.17.

The data sets continue to diverge with price movement in the coming days. -0.9¢ ~ +3.5¢.

Still, just as the past few weeks... nothing dramatic in the way of prices surging, or at least for now and should continue until the Christmas holiday, imo.

 

This Week in Petroleum Summary October 30th, 2024 per EIA.GOV

This week's full report. 

Gasoline pump prices fell -0.2¢ for the week, and continues well below year ago levels, by -35.9¢, or -10.3%. Days supply fell to 23.3. For perspective... last year was 25.5 days. 

Inventories were down across the board , with crude down +515K barrels; Distillates down -977K barrels; Gasoline stocks down -2.7M barrels. Total Petroleum + products +SPR rose +6.7M barrels, with the SPR rising +760K barrels.

The total products is still +20.4M barrels ahead of year ago levels.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread slipped from last week's $17.01, to $16.62. Gasoline eased ever so slightly to $8.45 from last week's $8.74. Distillates to $8.17, compared to last week's $8.27.

One set of data indicates a further easing of pump prices, while another suggests nearing a bottom. Which is exactly what last week's data suggested, and the week prior, and the week prior, etc. This past week, did indicate both slight up and down movement in prices. -4.3¢ ~ +2.8¢. Take your pick. 

Still, just as the past few weeks... nothing dramatic in the way of prices surging, or at least for now and should continue until the Christmas holiday, imo.

This Week in Petroleum Summary October 23rd, 2024 per EIA.GOV

This week's full report. 

Gasoline pump prices fell -4.1¢ for the week, and continues well below year ago levels, by -39.4¢, or -11.1%. Days supply rose to 24.0. For perspective... last year was 26.0 days. 

Inventories were mixed , with crude up +5.5M barrels; Distillates down -1.1M barrels; Gasoline stocks rose +878K barrels. Total Petroleum + products +SPR rose +6.7M barrels, with the SPR rising +760K barrels.

The total products is still +25.6M barrels ahead of year ago levels.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread slipped from last week's $17.29, to $17.01. Gasoline eased ever so slightly to $8.74 from last week's $8.75. Distillates to $8.27, compared to last week's $8.54.

One set of data indicates a further easing of pump prices, while another suggests nearing a bottom. Which is exactly what last week's data suggested, and the week prior, and the week prior, etc. This past week, did indicate both slight up and down movement in prices. -2.3¢ ~ +3.1¢. Take your pick. 

Still, nothing dramatic in the way of prices surging, or at least for now and should continue until the Christmas holiday, imo.

This Week in Petroleum Summary October 17th, 2024 per EIA.GOV

This week's full report. 

Gasoline pump prices fell -1.6¢ for the week, and continues well below year ago levels, by -38.8¢, or -10.8%. Days supply fell to 23.6. For perspective... last year was 26.1 days. 

Inventories fell across the board , with crude down -2.2M barrels; Distillates down -3.5M barrels; Gasoline stocks fell -2.1M barrels. Total Petroleum + products +SPR slid -6.1M barrels, with the SPR rising +952K barrels.

The total products is still +18.5M barrels ahead of year ago levels.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread rose from last week's $16.52, to $17.29. Gasoline rose to $8.75 from last week's $8.42. Distillates to $8.54, compared to last week's $8.10.

One set of data indicates a further easing of pump prices, while another suggests nearing a bottom. Which is exactly what last week's data suggested, and the week prior, and the week prior. This past week, did indicate both slight up and down movement in prices. -4.8¢ ~ +2.8¢. Take your pick. 

Nothing dramatic in the way of prices surging, or at least for now. 

This Week in Petroleum Summary October 9th, 2024 per EIA.GOV

This week's full report. 

Gasoline pump prices rose +0.9¢ for the week, and continues well below year ago levels, by -49.9¢, or -13.5%. Days supply fell to 23.8. For perspective... last year was 26.8 days. 

Inventories were mixed , with crude increasing +5.8M barrels; Distillates down -3.1M barrels; Gasoline stocks fell -6.2M barrels. Total Petroleum + products +SPR slid -7.7M barrels, with the SPR rising +680K barrels.

The total products is still +12.6M barrels ahead of year ago levels.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread rose from last week's $15.70, to $16.52. Gasoline steady to $8.42 from last week's $8.42. Distillates to $8.10, compared to last week's $7.83.

One set of data indicates a further easing of pump prices, while another suggests nearing a bottom. Which is exactly what last week's data suggested, and the week prior. This past week, did indicate both slight up and down movement in prices. -3.2¢ ~ +3.0¢. Take your pick. 

This coming week... only time will tell.