Crude Inventories continue to build- Feb 23 2023

Today's EIA.gov report. 

Crude stocks up again, +7.6M barrels, from last week; Distillates up +2.7M Barrels; and Gasoline slid -1.9M barrels. 

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WTI at $75.76, compared to $78.83, one week ago, and $90.39 a year ago. 

Refinery output slightly decreased on this report, and still slightly below one year ago levels. 

For anyone interested, the U.S. has exported 475M barrels of crude and petroleum products, more than imported, since March 1, 2022. 5.4M barrels this past week.

Overall, crude stocks are quite healthy, compared to this time last year (2nd highest- 2016), and the highest since May 28, 2021.

The Administration has suggested another SPR release, but the SPR is currently unchanged, for the past 6 weeks.

Cooking With Natural Gas Feb 16 2023

I had briefly considered a seasonal hiatus regarding the NatGas reports, but something popped up in my in basket, telling me to hold on for at least another 6 weeks. The Groundhog didn't lie, just missed the timing!!

The Energy Information Administration released their weekly report Thursday.

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Again, drops in supplies were evident, yet still holding above year ago levels. West Coast and Mountain regions being the exceptions.

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Looking good so far.

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Prices keep slipping everywhere. Even in the UK, the price range is £1,800 ~ £2,300 (annual), compared to last summer's £3,600 ~ £5,400 (annual). 

Prices are low due to decreased demand, due to much warmer temps, etc. Prices are so low, the need for added storage is being reduced, companies are considering cutting back on drilling, etc.

Spring is in the air and everything looks great. Why am I being so sarcastic?

Climate change leads many to think solely in terms of global warming. On average, that would be correct. But climate change is all about extreme weather events. We acknowledge these events when it is due to significant flooding, droughts, hurricanes, extreme cold snaps, etc. 

However, we seem to disregard those mild temps. Much of Europe is in an extreme weather event. Law of averages will level that out, AND possibly in the near future. 

Good luck!!

Today's PPI Release... February 16th, 2022

The BLS has released the January Producer Price Index Report. (historical releases)

The Producer Price Index for final demand increased 0.7 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices declined 0.2 percent in December 2022 and advanced 0.3 percent in November. (See table A.) On an unadjusted basis, the index for final demand rose 6.0 percent for the 12 months ended January 2023. 

In January, a 1.2-percent rise in prices for final demand goods led the advance in the final demand index. Prices for final demand services also moved higher, increasing 0.4 percent.

The index for final demand less foods, energy, and trade services rose 0.6 percent in January 2023, the largest advance since moving up 0.9 percent in March 2022. For the 12 months ended in January 2023, prices for final demand less foods, energy, and trade services increased 4.5 percent. 

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So the numbers were higher than expectations. I think someone under estimated those numbers. Last month's intermediates suggested a pop in final demand for this month. My estimate was wrong at +0.8% for the month. That was a miss to the high side. 

Next month is likely to surprise to the low side, possibly even a monthly negative, with annual at the +4.4% range.

Probably wrong again, but hopefully, to the high side... again.

Gasoline consumption through week of Feb-10-2023

Gasoline prices were (per AAA) were down 2.7¢ this week, to $3.418. A year ago, the price was $3.498. There were intermittent problems with refineries in different regions, that may have impacted current pump prices.

The 17 day streak of falling prices, ended today. Maybe another streak downward will soon start.

The seasonal consumption is edging up. (This is a four week moving average). It is -0.9% 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 2022, stands at +90.1M barrels. If you saw last week's report, that is up 1.3M barrels. This is a global market, so the global economy, as well as refinery output, is key to where pump prices will be.

Where will pump prices be next week? My inclination would be slightly lower, but that might be wishful thinking.

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?