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
$60bn opportunity opens up for plastics industry as need to eliminate single-use packaging grows
17/03/2019

150 businesses representing over 20% of the global plastic packaging market have now agreed to start...

Read
Ageing Perennials set to negate central bank stimulus as recession approaches
10/03/2019

The world’s best leading indicator for the global economy is still firmly signalling recession...

Read
Déjà vu all over again for oil markets as recession risks rise
03/03/2019

Back in 2015, veteran Saudi Oil Minister Ali  Naimi was very clear about Saudi’s need to adop...

Read
BASF prepares its UK supply chain for Brexit
24/02/2019

BASF has been working with Ready for Brexit (the online platform I co-founded last year) as part of ...

Read
Companies and investors have just 30 working days left to prepare for a No Deal Brexit
17/02/2019

Companies across the UK and EU27 are suddenly realising there are now just 30 working days until the...

Read
The BoE’s pre-emptive strike is not without risk
12/02/2019

The Financial Times has kindly printed my letter below, arguing that it seems the default answer to ...

Read
IKEA heads into the circular world with furniture subscription trial
10/02/2019

“Once upon a time, Granny and Grandad used to go to a large shop on the motorway to buy their ...

Read
Fed’s magic money tree hopes to overcome smartphone sales downturn and global recession risk
03/02/2019

Last November, I wrote one of my “most-read posts”, titled Global smartphone recession ...

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