• Tanker Farm

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    Gasoline Demand vs Price is Correlation Real?

    Price of gasoline does not seem to correlate with demand.

    Looking at the adjacent graph we might conclude that the price of gasoline in the US has little correlation with the demand. In fact either on May 2003 and again late 2015 when the price of gasoline bottomed in the US, the consumption of gasoline either stayed the same or was lowered by a little. Additionally in the run from 2001 to 2008 –when the price topped at $4 per gallon the consumption increased from about 9000 bpd to 9500 bpd. On the summit of Sept 2008 the priced plummeted to $1.75.  Now in the early 2016, the retail price is at $2.00 but the NYMEX Futures are at $1.15 and the demand maintained a is on a positive.   There is little evidence that demand is slowing in the USA; there is also little evidence that the world demand is significantly lower.


    Oil Inventories in the World on the high side.

    The adjacent graph shows inventory in days of supply (rather than quantity).  As shown, the world supply has grown from 22-23 days to 26-27 days.  This is due in part of the availability of storage tanks but also on the rate that those tanks are filled.

    graph of monthly OECD commercial crude oil inventory days of supply, as explained in the article text


    Cushing Storage close to capacity but does it correlate to price?

    Storage capacity at Cushing at record levels but not at maximum percentage.

    The total capacity is 70.8 million barrels and it currently stands at 50.4 MM BBL or 77% of capacity. However, in January 2011 the storage at Cushing was at 90% capacity.

    When we compare the storage capacity to the price of the current month in NYMEX (CL1!) we find no correlation.

    graph of weekly crude oil inventory and storage capacities at Cushing, Oklahoma, as explained in the article text





    A View of Hormuz

    Hormuz is the choke point for oil traffic flowing out of the Persian Gulf. Worries about the political health in this region affect the psychology and behavior of oil traders.
    This is the current view of the Straits of Hormuz. Touch any vessel to find description; red-ones are tankers.