Crude Inventories continue to build- Feb 15 2023

Today's EIA.gov report. 

Crude stocks soared, up +16.2M barrels, from last week; Distillates slipped -1.2M Barrels; and Gasoline up +2.3M barrels. 

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WTI at $79.23, compared to $78.47, one week ago, and $89.81 a year ago. 

Refinery output slightly increased on this report, but still slightly below one year ago levels. 

For anyone interested, the U.S. has exported 470M barrels of crude and petroleum products, more than imported, since March 1, 2022. After two weeks of net imports, the margin is back to net export of +4.7M barrels.

Overall, crude stocks are quite healthy, compared to this time last year (3rd highest- 2016/2017), and the highest since June 4 2021.

The Administration has also indicated another release from the SPR, as mandated by law. The impact on gasoline prices would be slight, as refining is the bottleneck at this point... not supply of crude.

The January Retail Sales Report

ADVANCE MONTHLY SALES FOR RETAIL AND FOOD SERVICES, January 2023 

Advance Estimates of U.S. Retail and Food Services

Advance estimates of U.S. retail and food services sales for January 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $697.0 billion, up 3.0 percent (±0.5 percent) from the previous month, and up 6.4 percent (±0.7 percent) above January 2022. Total sales for the November 2022 through January 2023 period were up 6.1 percent (±0.5 percent) from the same period a year ago. The November 2022 to December 2022 percent change was unrevised at down 1.1 percent (±0.3 percent).

Retail trade sales were up 2.3 percent (±0.5 percent) from December 2022, and up 3.9 percent (±0.5 percent) above last year. Food services and drinking places were up 25.2 percent (±2.6 percent) from January 2022, while general merchandise stores were up 4.5 percent (±0.2 percent) from last year. (emphasis added)

The data is not inflation adjusted. The data in this graph is...

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The clue being the emphasis I added in the clip from the release. Sales were up 6.4%, but so was inflation. Units of good, were basically the same as a year ago.

Over 68% of the total increase from December was in the following.

For anyone wishing to "annualize" today's numbers, we are in a rinse and repeat cycle, as indicated by previous year's numbers.

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To summarize... despite the "stellar" 3.0% rise in sales over December, we are back to January 2022, in goods purchased. The rest is inflation.

That's not bad, just not really "stellar", in my humble opinion.

Real Earnings report, February Reports 2023

The BLS has released the latest Real Earnings Report.

All employees

Real average hourly earnings for all employees decreased 0.2 percent from December to January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from an increase of 0.3 percent in average hourly earnings combined with an increase of 0.5 percent in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings increased 0.7 percent over the month due to the change in real average hourly earnings combined with a 0.9-percent increase in the average workweek.  

Real average hourly earnings decreased 1.8 percent, seasonally adjusted, from January 2022 to January 2023. The change in real average hourly earnings combined with an increase of 0.3 percent in the average workweek resulted in a 1.5-percent decrease in real average weekly earnings over this period.

Treading water is the best way to describe the earnings report. The hourly rate is -3¢ lower than February 2020, with the weekly earnings at $2.45 more.

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I use February 2020, as the baseline. Everything thereafter was distorted by the type of jobs available, etc. 

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Real Earnings are adjusted for inflation. The question remains... what is the inflation outlook?

CPI DATA results, February Reports 2023

The BLS report was released this morning and it was a shade above consensus estimates. (historical releases)

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.5 percent in January on a seasonally adjusted basis, after increasing 0.1 percent in December, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 6.4 percent before seasonal adjustment.

The index for shelter was by far the largest contributor to the monthly all items increase, accounting for nearly half of the monthly all items increase, with the indexes for food, gasoline, and natural gas also contributing. The food index increased 0.5 percent over the month with the food at home index rising 0.4 percent. The energy index increased 2.0 percent over the month as all major energy component indexes rose over the month.

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It would seem the food at home index is getting a lot of attention. The concept that things are really getting better in this area. 

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Aside from the dip in November, the prices have been increasing. Of course, that didn't prevent one wag from looking at the wrong line on the report and coming up with something called a 3 month average, annualized, as proof that things are trending downward. 

Except, the downward trend, sharply ended a couple of months ago, and is now on the rise. Using the correct line from the report, yields this...

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So yes, this method does indicate a number below the y/y, but is now indicating 2 consecutive months of upward movement. The M/M unadjusted was +0.8%, or annualized to 9.6%. Not far from the y/y rate of 10.1%.

I get the distinct impression the CPI coming up above expectations, is being rationalized with but, but, but arguments.

Not sure how these arguments can hold up, but we Americans are easily manipulated. Actually, people around the globe are much the same.

Cooking With Natural Gas Feb 9 2023

The Energy Information Administration released their weekly report Thursday.

Natural Gas storage is still within 5 year range for the USA.

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There was quite a drop in this last reporting period, but still remains in good shape on the 5 year scale.

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As for pricing, the Northeast and West Coast saw significant drops in prices, as outlined in the report. Generally speaking, the prices in the USA fell back to seasonal norms of 2 years ago. 

The situation in Europe has seen prices fall dramatically, but still quite elevated... compared to 2 years ago. 

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In any event, the winter has been mostly mild and translated into less than expected drawdowns. HOWEVER, no one can forecast next winter's weather, so expect some upward movement in Natural Gas prices... come mid summer. 

Gasoline consumption through week of 2-03-2023

Gasoline prices were (per AAA) were down 5.6¢ this week, to $3.445. A year ago, the price was $3.49.

Not sure how long this will last, although inventories are up and refinery output did slightly increase.

The however... is right on cue, as the seasonal consumption is edging up. (This is a four week moving average). It is -1.3% below one year ago levels. 

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If you are really into this type of thing... the import/export surplus of gasoline since last March 1st, stands at 88.8M barrels. If you saw last week's report, that is down 300K barrels. Somehow, I doubt that continues, although economic conditions might keep it downward in trajectory.

My completely ignorant prediction is... pump prices will be lower by this time next week. I won't go any further. 

Gasoline, Crude and Distillate Inventories - FEB-08-23

 Today's EIA.gov report. 

Crude stocks went up +2.4M barrels, from last week; Distillates up 2.9M Barrels; and Gasoline up 5M barrels. 

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WTI at $78.46, compared to $77.20, one week ago, and $87.90 a year ago. 

Refinery output slightly increased on this report, but still below one year ago levels. 

For anyone interested, the U.S. has exported 465.3M barrels of crude and petroleum products, more than imported, since March 1, 2022. This week's report marks two consecutive weeks with net deficit of import/export. 6.1M barrels to be precise.

Overall, crude stocks are quite healthy, compared to this time last year (4th highest), also being in the upper 5 year range and the highest since June 2021.

So what could go wrong?