Wednesday, March 25, 2009

Of gasoline demand and automobile fuel production.

It being a Wednesday, there is a new TWIP report out, and so we try and interpret what they had said and what it suggests for the future. At the same time the Federal Highway Administration have released the January driving figures, and what optimism was left about the economy is reduced a little.

So what am I talking about? Let’s begin with the weekly graphical plot for gasoline demand (from This Week in Petroleum where along with the current numbers it is possible to do some analysis.

Source EIA .

Now we’re squinting at the line to ensure that the red continues to increase, and with our remaining optimism, the end of the curve does seem to be tending back upward still. If it will only continue. But when we plot, for the past five years motor miles driven per month at this time, The conclusions are not pretty. Looking first at the January figures for the amount of miles driven, one can see the drop in the past year, against the rise in all but the year precious.

Monthly mileage driven in the US for periods of 6-months for the last 5 years (source DOT). The current line is obviously still heading down, and though leveling off, is not quite an optimistic projection as I had expected at the time.

What is then interesting is to look at the total accumulative miles driven over the period and suddenly you see the trend is still down even if slightly less so.

When we do a monthly plot with a rolling 12 month average, then we get another curve, and this suggests that while we might have dug our way out of this a little we have a long way to go.

Source FHWA Mileage driven by month since 1984 (Source FHWA).

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