Gasoline Demand (EIA ) If you look at this time last year the current curve seems to be tracking what happened back then, and the steady upward trend in demand that has occurred in the last two years as we move forward from this date will, I suspect, likely be repeated.
What is that going to do to gasoline prices, and with them the price of crude? Well prices have dropped back a little, bear in mind that it was this time last year that they bottomed out, and then there was a run-up until about August, which was the end of the summer driving season.
Average gasoline prices (EIA) We have had the same sort of pattern with crude prices (and the change since last February is why I consider recent drops as relative inconsequential). Domestic crude, after a steady rise since last August, has taken a little drop, and with imports also falling, the inputs into domestic refineries are around 900 kbd off last year’s numbers.
Refinery inputs of crude (EIA) There is still enough oil available through the market to cover an expected increase in demand over the short term, but I have a growing concern for supply on the summer of 2011.
Looking at traffic volumes, after a little hiccup in October, the numbers for November were more of a gain. The average traffic increased by 1.4%. While for the entire year through November traffic had risen by 0.3%. And this time all regions were showing an increase in traffic, although there was still a decline in urban traffic off the interstate.
Monthly changes in miles driven for 2009 relative to 2008 (FHWA ) The hiccup does show up in the running 12-month total, which has flattened, at around the levels that we were at in 2004, when the curve was merrily climbing upwards.
Cumulative miles driven through November 2009 (FHWA ) Given that car sales rose 6% last month (with the exception of Toyota) with some manufacturers showing double digit rises in sales over last year there is more promise for the economy in these numbers.
Saudi Arabia is maintaining higher levels of supply both to Asia and to Europe. And while Russia is still playing nice, as the Ukrainian election is on Sunday, and it still has a candidate or two in the race, it too has promised to keep supplies up to Western Europe. With the higher crude prices bringing a bit of stability back, perhaps we can get through this winter without any histrionics in that part of the world.
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The simple statistics for US new car and truck sales have become ambiguous. Yes, January 2010 new car and truck sales were up 6.3% over 2009 but Jan 2009 was down 37% over January 2008, which was down around 6% over January 2007.
ReplyDeleteVMTs are about where they were in 2004. New car and truck sales have fallen to the level they were last at in 1983. This decline reflects several changes in behaviour that an improving economy is unlikely to erase.
New cars can reliably be driven further than in the past and people are keeping them longer. Some people are driving less. Some families have moved from two cars to one, and a relative few have given up car ownership altogether.
Many in the industry view 2007 as the last 'normal' year. I'd be surprised if sales recover to those levels quickly.
I think that the signals are very mixed at the moment, and I am a little more cautious than I was say a month ago.
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