Gasoline consumption per latest EIA data, July 12, 2023

Gasoline prices (per AAA) rose from last report to $3.541, as anticipated. One year ago the price had fallen to $4.665, and was on its downward trajectory... into the mid September lull, around  $3.67.

Consumption slipped week over week, but stands 6.3% above year ago numbers. (This is a four week moving average).

The import/export surplus of gasoline since last March 1st 2022, jumped to +101.1M barrels. It had basically remained flat for the past 3 months, until this past week's 2.3M barrel jump.

Rinse and repeat. There remains a slight upward bias, mostly due to a jump in WTI price, due to mostly dollar fall, mostly due to anticipation of FED pausing rate hikes, due to today's CPI report. 

All of which will likely come due... when next month's CPI tracks higher. 

Crude and Petroleum Product Inventories - July 12 2023

Data per the EIA weekly report. 

Crude stocks Increased by +5.9M barrels, from last week, yet remains down -0.9% from the 5 year seasonal average. It should be noted the 5 year average includes the abnormal 2020 and 2021 number. Otherwise, the current inventory is nearly +2.5% above normal.

Distillates inventory jumped +4.8M barrels; and Gasoline inventories stayed flat. Distillates (-14%,-3.7%) and Gasoline (-5.6%, -2.8%) are both below 5 year and 3 year adjusted average inventories.

The SPR fell another -401K barrels.

WTI is $75.87, compared to $72.09, one week ago, and $90.15, one year ago.

Refinery output imporved on a weekly basis, yet remains below year ago levels

For anyone interested, the U.S. has exported 745M barrels of crude and petroleum products, more than imported, since March 1, 2022. It jumped nearly 10M barrels this past week.

Overall, crude stocks remain quite healthy, compared to this time last year, with days supply at 28, compared to last year's 25.9 days.

So how could inventories increase and yet the price of WTI go up? It is petro dollars and the dollar slipped due to the anticipated great news on the CPI, which would mean the FED might pause rate hikes. 

As the old saying goes...

You can fool all of the people some of the time,

And fool some of the people all of the time.

But you can't fool all the people, all of the time.

The question becomes... who is fooling whom? 

BLS releases latest Real Earnings... July 12, 2023

The BLS has released the latest Real Earnings Report. 

Real average hourly earnings for all employees increased 0.2 percent from May to June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from an increase of 0.4 percent in average hourly earnings combined with an increase of 0.2 percent in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings increased 0.5 percent over the month due to the change in real average hourly earnings combined with a 0.3-percent increase in the average workweek.  

Real average hourly earnings increased 1.2 percent, seasonally adjusted, from June 2022 to June 2023. The change in real average hourly earnings combined with a decrease of 0.6 percent in the average workweek resulted in a 0.6-percent increase in real average weekly earnings over this period.

Generally speaking, real income growth has about matched pre-Covid, per the graphs below.

But first, as usual, a few notes about the graphs and underlying data, especially #2 and #3, which seem to fall into the political rhetoric arena....

1. These hourly and weekly figures are in 1982~1984 dollars, so that inflationary impact can be easily seen. The $11.03 per hour in the first graph would be $33.34 per hour in today's dollars. 
2. Much is made about the decrease in hourly wages, but some easy explanation... We can all remember when covid shut everything down, and people were sent home. Some kept working at their jobsite or from home. 
3. Many others went home without a job. A lot of those were lower wage employees, which skewed the hourly and weekly rates upward, until those employees slowly returned to work.
4. I have January, 2020 (pre-covid) on each graph, so that comparisons can be made to current. Also, the unemployment rate then and now are very similar. 

A 3¢ an hour gain since pre-covid. Considering "real" earnings is adjusted for inflation, this can be considered a positive.

Real weekly earnings finally pulled ahead of pre-covid levels. This is good news and hopefully continues.

Then there is what I refer to as the average person categories...

The hourly rate is 2% above pre-covid.

This category is 2.2% above pre-covid. This is the best news of the day and doesn't seem to get any attention. 

Oh well... on to today's energy reports. 

CPI Latest DATA results, July 12, 2023

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

The consensus: 0.2% increase in CPI (monthly); 0.3% increase in core CPI (monthly); 3.0% Y-Y CPI; and core 5.0% Y-Y. The result: 0.2% CPI (monthly); 0.2% core (monthly); Y-Y CPI at 3.0%; and core at 4.8% Y-Y. The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2 percent in June on a seasonally adjusted basis, after increasing 0.1 percent in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.0 percent before seasonal adjustment.

The index for shelter was the largest contributor to the monthly all items increase, accounting for over 70 percent of the increase, with the index for motor vehicle insurance also contributing. The food index increased 0.1 percent in June after increasing 0.2 percent the previous month. The index for food at home was unchanged over the month while the index for food away from home rose 0.4 percent in June. The energy index rose 0.6 percent in June as the major energy component indexes were mixed.

A lot was made about the year over year dropping for 12 consecutive months. It has, but that party is coming to an end, as July is set to pop up by +0.34% to +3.4% annual, and core up +0.4%, to +4.8% annual.

For some reason, the idea that 3.0% annual is normal!

Since January 1948~ January 2021, the average has been 3.5%, so it could be said 3.0% is normal. However, the 21st century up to January 2021... saw an average of 2.1%. So which "normal" is it?

While the report seems to be "good', let's not forget the index has risen 16.6% in 27 months and the cost of food at home has risen 19.9% during the same period.

The notion that consumers are under less stress due to this report is baffling. It is still an increase in most everything... except gasoline and energy et al. 

In the absolutely to early to project something category... the current outlook for C.O.L.A.

So far this month...

Time for more graphs... past 12 month CPI readings.

June, 2022 was the peak of annual inflation at 9.1%. Inflation for the following 6 months was 0.2% or 0.4% annualized. The major driver in those numbers were the dropff in energy prices. The following 6 months saw prices increase 2.8% or 5.6% annualized, as energy prices stabilized.  

To repeat the 2.97% annual inflation for next month would require a flat month to month CPI. That would require an extraordinary drop off from current expectations. Energy looks to be stable, so where would such a dropoff take place?

And finally... My CPI over the past 12 months.

Next up is the "Real Earnings Report".

Natural Gas Inventory Report, July 07, 2023

The Energy Information Administration released their weekly report yesterday.

And as customary... the Pacific Region.

In California, prices declined week over week but remained elevated compared with other U.S. pricing hubs. The price at SoCal Citygate in Southern California decreased 98 cents from $4.83/MMBtu last Wednesday to $3.85/MMBtu yesterday. Consumption of natural gas in the electric power sector in California increased by 92% (1.0 Bcf/d) week over week, as temperatures increased. 

Select inventories of EU and UK... 

Yes, I am aware the capacity numbers change from time to time. Why... I don't know. If it troubles you... then you can figure it out.

While up in many area, the EU wide number slipped to 78.63%, from last week's 78.86%. Still remarkably high for the season. 

A brief look at the 12 month highs for futures... TTF (EU) and UKG (UK).

Showing an upward drift.

However, current week ending prices...

Snapshot of the past, the current and the future outlook for prices.

Just for comparison, the UK current pricing would suggest £1,578.22 per annum, while the 12 month high (Jan-24) would suggest £2,318.11. OFGEM has a cap around £2,047, which is line with the October futures.

It should be noted the OFGEM cap reduction was more of a reduced consumption number, not so much as lower price per unit. Make of that, as you wish.

Gasoline consumption per latest EIA data, July 06, 2023

Gasoline prices (per AAA) eased down  from last report to $3.529. One year ago the price had ballooned to $4.779, but was on its downward trajectory... into the mid September lull, around  $3.67.

Consumption increased week over week, and stands 5.0% above year ago numbers. (This is a four week moving average).

The import/export surplus of gasoline since last March 1st 2022, stands steady at +98.7M barrels. It has basically remained flat for the past 3 months.

Rinse and repeat. There remains a slight upward bias, even though pump prices edged down this past week. 

Nothing dramatic, imho.

Crude and Petroleum Product Inventories - July 06 2023

Data per the EIA weekly report. 

Crude stocks fell by -1.5M barrels, from last week, and remains down -2.5% from the 5 year seasonal average. It should be noted the 5 year average includes the abnormal 2020 and 2021 number. Otherwise, the current inventory is nearly +1.6% above normal.

Distillates inventory slid -1M barrels; and Gasoline inventories dropped by -2.5M barrels. Distillates and Gasoline are both below 5 year and 3 year adjusted average inventories.

The SPR fell another -1.458M barrels.

WTI is $72.09, compared to $69.45, one week ago, and $101.53, one year ago.

Refinery output slid on a weekly basis, and compared to year ago levels.

For anyone interested, the U.S. has exported 735M barrels of crude and petroleum products, more than imported, since March 1, 2022. It jumped nearly 4.2M barrels this past week.

Overall, crude stocks remain quite healthy, compared to this time last year, with days supply at 27.7, compared to last year's 25.8 days.