Crude Inventories Edge Up - Mar 22 2023

Today's EIA.gov report. 

Crude stocks up again, +1.1M barrels, from last week; Distillates slid -3.3M Barrels; and Gasoline slid -6.0M barrels.  

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WTI has risen to $70.09, compared to $68.39, one week ago, and $107.06 a year ago. 

Refinery output edged up on a weekly basis, but still below one year ago levels. 

For anyone interested, the U.S. has exported 554.6M barrels of crude and petroleum products, more than imported, since March 1, 2022. 25.9M barrels this past week.

Overall, crude stocks remain quite healthy, compared to this time last year, with days supply at 31.7, compared to last year's 26.6 days.

The SPR remains steady for the past 9 weeks at 371.579M barrels.

2024, an election for the ages, or aged!

In a much to early review of the 2024 election, I provide my totally uneducated, possibly biased, sarcastic, and pragmatic predictions. 

Listed below are the potential candidates for each parties nomination, according to a variety of sources.

I have them listed in reverse order of age, which is age on January 20, 2025, as well as end of 2nd term.

I'll start with the democrats, and quickly eliminate some. An example would be Michelle Obama, as she has very much made it clear... she is not interested. When I look down the list, I quickly realize some of these names have some traction, but not enough to unseat Biden, imho. 

The intrigue within the democrat ranks, would be the VP choice. Replacing Harris might be considered, but is fraught with peril, regarding demographics. I'll be frank... someone that is not old, not male, and not white. That only leaves a couple of choices... so it will be Harris, imho.

DEMOCRATS...

• Joseph Biden  82.2 ~ 86.2
• Bernie Sanders 83.4 ~ 91.4
• Hillary Clinton 77.3 ~ 85.3
• Elizabeth Warren 75.6 ~ 83.6
• Phil Murphy 67.4 ~ 75.4
• Amy Klobuchar 64.7 ~ 72.7
• Michelle Obama 61 ~ 69
• Kamala Harris 60.3 ~ 68.3
• JB Pritzker 60 ~ 68
• Gavin Newsom 57.3 ~ 65.3
• Cory Booker 55.8 ~ 63.8
• Gretchen Whitmer 53.4 ~ 61.4
• Jared Polis 49.7 ~ 57.7
• Ro Khanna 48.4 ~ 56.4
• Pete Buttigieg 43 ~ 51
• Alexandria Ocasio-Cortez 35.3 ~ 43.3

The actual fun, going into 2024, would be the republican race. Trump clouds up everything for the republicans. For all the talk of someone else, at this point, that does not seem likely. Whether you love him or hate him, he is likely the nominee.

The VP choice, is filled with intrigue. There are many that would not make the grade, for a variety of reasons. With the biggest reason, being Trump himself. You would also have to consider 2028, and who might wish to avoid the VP position in 2024, and focus on that 2028 election.

It matters, as in my lifetime... 

• V.P. Barkley was deemed to old and lost the democratic nomination in 1952.
• V.P. Nixon left office in 1961, and made it to the Presidency, in 1969
• V.P. Johnson, assumed office on death of Kennedy (1963), and was elected in 1964.
• V.P. Gerald Ford assumed the Presidency in 1974, following Nixon's resignation, and lost in 1976.
• V.P. GHW Bush became President in 1989.
• V.P. Biden left office in 2017, becoming President in 2021. 

Other than deaths or resignations, the number is four, across 14 different Presidents. So the odds are not so good, imho.

Then you have the potential candidates for V.P., although Pence seemingly came from nowhere and likely based on donor connections. Then there is the toxic relations with many of the other candidates on this list. Seriously, can you imagine Liz Cheney as a Trump V.P. nominee?

Then there is the potential benefit to the ticket. Most are in republican safe states. Could Youngkin deliver Virginia's 13 electoral votes to the Republicans? Would he influence any other states?

So the V.P. nominee is a crap shoot, imho. 

REPUBLICANS...

• Donald Trump  78.6 ~ 82.6
• John Bolton 76.2 ~ 84.2
• Asa Hutchinson 74.1 ~ 82.1
• Larry Hogan 68.7 ~ 76.7
• Greg Abbott 67.2 ~ 75.2
• Mike Pence 65.6 ~ 73.6
• Chris Christie 62.4 ~ 70.4
• Mike Pompeo 61.1 ~ 69.1
• Tim Scott 59.4 ~ 67.4
• Liz Cheney 58.5 ~ 66.5
• Glenn Youngkin 58.1 ~ 66.1
• Ted Cruz 54.1 ~ 62.1
• Kristi Noem 53.2 ~ 61.2
• Nikki Haley 53 ~ 61
• Chris Sununu 50.2 ~ 58.2
• Will Hurd 47.4 ~ 55.4
• Ron DeSantis 46.4 ~ 54.4
• Vivek Ramaswamy 39.5 ~ 47.5

Now onto the general election. My long history suggests that Democrats will vote Democrat, and Republicans will vote Republican. I cannot believe that many people cross party lines to vote. I will acknowledge that most registrations are based on local politics. 

There are many local races, that are predominately one party locations. Which means the people register to that party, to influence the local primaries. Generally speaking, there are many instances when the winner of the local primary, runs unopposed in the general election.

Nationally, the breakdown of registration is this...

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In the last election, the independent vote was split almost evenly. BUT the elections are not based on majority votes, but rather majority Electoral College votes. Please do not start whining about whether it is fair or not... it is constitutional. It's not going to change in the next two years.

So, a look back to 2016... IF about 39,000 votes in a handful of close state races, that went to Trump had voted for Clinton, Clinton would have won that election, with 273 EVs. (Pennsylvania - 22.2k; Michigan - 5.4k; Wisconsin - 11.4k). (Margins were higher, but IF 50.1% had switched votes.)

In 2020, if about 63,000 votes in a handful of close state races, that went to Biden had gone to Trump... Trump would have won the election. (About 21.6k votes in Georgia (5.9k), Arizona (5.3k), and Wisconsin (10.4k) would have tied it, at 269 each. Pennsylvania's 41.4k, would have been over the top, for Trump, at 289.)

Scary ain't it! 

In 2024, pay attention to the "toss-up" states. Arizona, Georgia, Wisconsin, Pennsylvania, and yes... possibly "hanging chads" Florida. 

Whatever you may think, several factors will weigh heavily on the 2024 election and it should come as no surprise... the hysteria surrounding those several factors. The 2024 election is not a slam dunk for either party. 

The economy will play an enormous factor. At this point, who really knows what will take place, although lies will be the order of the day, from both parties. 

Remember, 2024 will likely hinge on a couple of hundred thousand "independents" in those "toss-up states."

It should be fun to watch. By that, I am hoping to be around to watch it!!

Cooking With Natural Gas March 16 2023

The Energy Information Administration released their weekly report Thursday.

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The current storage is near the high end of 5 year average, for this time of year. That is a good thing, but we should soon enter into a storage growth period.

Of course, it varies by region...

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Mountain and Pacific regions are still down, and has been reflected by their prices over the past few weeks. The good news, is those prices are falling. 

The price at Sumas on the Canada-Washington border, the main pricing point in the Pacific Northwest, fell $3.74 from $7.16/MMBtu last Wednesday to $3.42/MMBtu yesterday. 

The price at Malin, Oregon, the northern delivery point into the PG&E service territory, fell $1.48 from $7.52/MMBtu last Wednesday to $6.04/MMBtu yesterday, leading to a $1.86/MMBtu decline in the price at the PG&E Citygate in Northern California from $8.80/MMBtu last Wednesday to $6.94/MMBtu yesterday. 

So the U.S. is starting to look good. HOWEVER, storage contains natural gas that was priced at much higher rates. While most futures are substantially down, that higher priced NatGas in storage will prop up energy prices to the consumer. They should trend downward from here. How long that takes... I don't know. 

The same situation is seen in UK and EU. However prices are still elevated and will likely remain elevated. There should be some easing to the consumer, but not sure that will happen this year. 

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An example might be the UK pricing. It will likely never return to February 2021 levels, unless Russian NatGas returns to the market. Not looking likely.

The UK had an outlook of £3,600~£5,500 late last summer and settled on a cap of £2,500. Current outlook is £1,700~£2,300. The cap remains in place, as the average price in storage... exceeds that cap.

That remains the situation in much of the EU. It will take a long while to recapture the excessive inventory costs of stored Natural Gas. 

In short, the outlook for EU and UK natural gas futures are in the current range. Same for the U.S. 

As for the U.S. consumer, it is not out of the realm of possibility, that lower natural gas prices will slowly trickle through the system and maybe return to levels of 2 years ago, by end of the year... hopefully.

The EU and UK will not see a return to levels of 2 years ago. Maybe a reduction of 10% sometime by end of the year. 

In any case, I have said my piece and will take a break from writing about natural gas... and partake of something, which will give me that other natural gas.

Gasoline consumption through last week ending, Mar-10-2023

Gasoline prices were (per AAA) were up 2¢ this week, to $3.466. A year ago, the price had ballooned to $4.316. 

The seasonal consumption is slipping a bit. (This is a four week moving average). It is -0.8% below one year ago levels. However, the national average pump price is -20.2% below same period.

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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 +95.9M 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? Something very serious is going on with crude, as prices have plummeted the past few days. With it, gasoline futures are in a bit of tailspin.

Last week, I forecast a 7¢ rise and got 2¢. That is a good thing. Currently the number are showing a dramatic fall of nearly -17¢. 

I wouldn't take that to the bank, although I am not sure what to take to a bank these days.

Crude Inventories Edge Up - Mar 15 2023

Today's EIA.gov report. 

Crude stocks up again, +1.5M barrels, from last week; Distillates slid -2.5M Barrels; and Gasoline slid -2.0M barrels. 

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WTI has fallen to $68.39, compared to $75.60, one week ago, and $92.83 a year ago. 

Refinery output edged up on a weekly basis, but still slightly below one year ago levels. 

For anyone interested, the U.S. has exported 528.7M barrels of crude and petroleum products, more than imported, since March 1, 2022. 24.8M barrels this past week.

Overall, crude stocks remain quite healthy, compared to this time last year, with days supply at 31.8, compared to last year's 27 days.

The SPR remains steady for the past 8 weeks at 371.579M barrels.

The February Advance Retail Sales Report

ADVANCE MONTHLY SALES FOR RETAIL AND FOOD SERVICES, February 2023 

Advance estimates of U.S. retail and food services sales for February 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $697.9 billion, down 0.4 percent (±0.5 percent)* from the previous month, but up 5.4 percent (±0.7 percent) above February 2022. Total sales for the December 2022 through February 2023 period were up 6.4 percent (±0.4 percent) from the same period a year ago. The December 2022 to January 2023 percent change was revised from up 3.0 percent (±0.5 percent) to up 3.2 percent (±0.3 percent).

Retail trade sales were down 0.1 percent (±0.5 percent)* from January 2023, but up 4.0 percent (±0.7 percent) above last year. Food services and drinking places were up 15.3 percent (±2.6 percent) from February 2022, while general merchandise stores were up 10.5 percent (±0.2 percent) from last year.

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

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Plain and simple... the quantity goods being bought, remained rather flat for several month. Inflation has made for the increases in cost.

but up 5.4 percent (±0.7 percent) above February 2022.

Again, that is before inflation is taken in consideration. The CPI-U, was 6.0%. 

For the month to month, with inflation adjustments...

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It hasn't fallen off a cliff, but it hasn't really grown. The growth is mostly due to inflation. 

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Adjusting for inflation, the above chart lists the only groupings that did not slip last month.

Not sure what to make of the data, to calculate going forward. Will find out next month!!

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

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

The Producer Price Index for Final Demand decreased 0.1 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.3 percent in January and declined 0.2 percent in December 2022. (See table A.) On an unadjusted basis, the final demand index rose 4.6 percent for the 12 months ended in February.

In February, the decline in the final demand index was led by prices for final demand goods, which fell 0.2 percent. The index for final demand services edged down 0.1 percent.

The index for final demand less foods, energy, and trade services increased 0.2 percent in February after rising 0.5 percent in January. For the 12 months ended in February, prices for final demand less foods, energy, and trade services advanced 4.4 percent.

Final demand goods: The index for final demand goods fell 0.2 percent in February following a 1.2-percent advance in January. A 2.2-percent decline in prices for final demand foods was a major factor in the February decrease. The index for final demand energy moved down 0.2 percent. In contrast, prices for final demand goods less foods and energy rose 0.3 percent.

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Okay, so let me blow my horn a bit, with last month's prediction...

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

Okay, got that out of the way. All in all a good report, with many areas of hope. Now on to the "Nonfood materials less energy." Which, I guess, is similar to core... being without food and energy. That popped +1.2% for the month, following January's +1.6%. I get this feeling it will be near +1.8%, when March's numbers come out. 

Still, I would anticipate March to be year over year of +3.0%, and month to month being flat.