General index, Crude Oil Data

Global Market Analysis, 15 July 2022

This week's analysis comes from North America with Refined Products Pricing Director, Jeffrey Bair, looking into what's driving US gasoline costs.

Are high gasoline prices starting to drive US demand destruction?

By Jeffrey Bair

It’s the kind of number that gets the attention of the folks who tell you what is next for oil.

In the week ending July 8, the amount of gasoline supplied to US markets fell 14%, dropping 1.4 million barrels a day to a little more than 8 million barrels a day, according to the latest EIA data. It's the best proxy market watchers have for demand.

General Index, US Gasoline

Here’s why it’s a cause for concern: motorists appear to be backing off travel because gasoline costs got so high.

Those prices have begun to come down, but that could not come in time to save the last reporting week. That number should have been higher because that period included the Fourth of July holiday.

And here is why all this it might not be a bad omen. The weekly number on product supplied is – to put it in a nice way – built on shaky foundations. The four-week number on product supplied is better to bet the family farm on. That figure is also down but not as much, and it benefited from two great weeks before the last one.

So watch the report for this week, for certain. Two or three down weeks like last week in a row will stoke panic.

Jeffrey Baird, U.S. Refined Products Pricing Director
Jeffrey Bair, America Refined Products Pricing Director
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