Gasoline stocks at all-time high ahead of US driving season

Consumer demand, Economic growth, Financial Events, Futures trading, Oil markets

US gasoline May10.pngThey say that you learn more from your mistakes than your successes. In the blog’s case, it will never forget the mistake it made when it began to build a long position in early May, soon after arriving in Houston, Texas. It was expecting product to go tight as the US gasoline season began on Memorial Day, at the end of May.

This was a completely wrong judgement. The scale of the US market means refiners have to move gasoline out of their systems before Memorial Day, if it is to reach the service stations in time. Luckily, a few kindly souls from the industry taught the blog the error of its ways, and little harm was done to ICI’s P&L.

The memory of that near-miss was triggered this morning when looking at the above chart from PetroMatrix’s valuable report. They note that US gasoline stocks (red line) are now “at an all-time record high” for this week in the year. Equally, stocks are actually building, rather than falling. I doubt this has ever been seen before in May.

The reason, of course, is the demand destruction being caused by today’s high prices. US oil stocks have been building at 1.1mbd for the past month, whilst the Mastercard survey is showing a 1.1% decline in gasoline demand versus 2009. If the blog was trading now in Houston, it would be very nervous indeed about holding a long position.

PREVIOUS POST

US auto market remains "very fragile"

05/05/2010

They say that you learn more from your mistakes than your successes. In the blog...

Learn more
NEXT POST

Markets approach the "drawn-out fundamental downtrend" phase

08/05/2010

They say that you learn more from your mistakes than your successes. In the blog...

Learn more
More posts
CEOs need new business models amid downturn
14/01/2019

Many indicators are now pointing towards a global downturn in the economy, along with paradigm shif...

Read
Stock markets risk Wile E. Coyote fall despite Powell’s rush to support the S&P 500
06/01/2019

How can companies and investors avoid losing money as the global economy goes into a China-led reces...

Read
Chart of the Year – China’s shadow banking collapse means deflation may be round the corner
16/12/2018

Last year it was Bitcoin, in 2016 it was the near-doubling in US 10-year interest rates, and in 2015...

Read
BASF’s second profit warning highlights scale of the downturn now underway
09/12/2018

The chemical industry is easily the best leading indicator for the global economy.  And thanks to K...

Read
Chemistry & the Economy: 2019 Outlook
04/12/2018

There will be no shortage of important topics to discuss on Thursday, at my regular Chemistry and th...

Read
Brexit moves from ‘Snakes and Ladders’ to cricket
02/12/2018

The Brexit debate had appeared to be a simple game of Snakes & Ladders till now.  The Leave cam...

Read
Asian downturn worsens, bringing global recession nearer
25/11/2018

The chemical industry is the best leading indicator for the global economy.  And my visit to Singap...

Read
Your ‘A-Z Guide’ to the Brexit Negotiations
18/11/2018

“The UK is now facing a national crisis”, according to Margaret Thatcher’s former ...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more