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Inquiring minds are watching a plunge in Petroleum Distillates and Gasoline usage.

Reader Tim Wallace writes

Hello Mish

As I have been telling you recently, there is some unprecedented data coming out in petroleum distillates, and they slap me in the face and tell me we have some very bad economic trends going on, totally out of line with such things as the hopium market - I mean stock market.

This past week I actually had to reformat my graphs as the drop off peak exceeded my bottom number for reporting off peak - a drop of ALMOST 4,000,000 BARRELS PER DAY off the peak usage in our past for this week of the year.

I have added a new graph to my distillates report, a "Graph of Raw Data" to which I have added a polynomial trendline. You can easily see that the plunge is accelerating and more than rivals 2008/09 and in gasoline is greatly exceeding the rate.

An amazing thing to note is that in two out of the last three weeks gasoline usage has dropped below 8,000,000 barrels per day.

The last time usage fell that low was the week of September 21, 2001! And you know what that week was! Prior to that you have to go back to 1996 to have a time period truly consistently below 8,000. We have done it two out of the last three weeks.

The second graph once again shows the year on year change in usage of distillates. The Obama "stimulus" package and Fed monetary actions masked the underlying systemic problems.

The third and final graph shows the changes in usage off the peak year of 2007. Once again you can see the effect of the stimulus and how now we are heading below 2008/09 in an accelerating fashion.

Looking at these numbers I believe we are about to have a surge in unemployment - by the end of April latest, possibly as early as beginning of March.

Tim

Petroleum Distillates and Gasoline Usage in Barrels per Day


Note that on a best curve fit, petroleum usage is back to 1997 level and gasoline usage is back to 2001 level. Moreover, as Wallace points out, two out of the last three weeks gasoline usage has dropped below 8,000,000 barrels per day.

Year-Over-Year Petroleum and Gasoline Usage (Compared to Peak Usage)



Note the trough of the recent recession, the rebound, and now a sudden plunge in gasoline and petroleum usage once again.

Decline from Peak Usage



A mild winter can explain part of the drop in petroleum usage (heating oil), but it does not explain the declines in gasoline usage or the overall trends.

Mike "Mish" Shedlock

Bring on the monkey!

That said I think "work from home" is eating into fuel used for commuting. I've been a home office guy for almost 4 years now and see that as a trend in many companies. On the other hand, this number would give with the declining numbers in the work force.

Rally On! Americans are doing their part to conserve!


...like remaining unemployed.

They will just massage the stats to mask any drop in employment.

It's all those Chevy Volts on the road.

This is very interesting and most likely has many factors but i think namely the economy is worse than what the MSM keeps spouting.

I know many here have held that for sometime like myself and i really do believe this summer will be bad in so many ways from tourism,construction etc.

That may be DB but the gov and MSM will just lie and release false stats because they are getting away with it now since J6P would still rather be watching the superbowl than paying attention to what's REALLY going on out there. It's easy to fool the people when the media is owned by 1 or 2 people who in turn are pulling all the strings and already own the politicians and judiciary. Until J6P wakes the **** up then this propaganda force feed will continue unabated for the indefinite future.

Yes. This calls for..................

It doesn't matter what they say the market has a way to figure it all out in the longer term....

Thx Tesla - this is one of the most important 'tells' I have seen in the last few years (assuming the stats aren't screwed up somehow).

The idea that telecommuting, better gas mileage cars etc is the cause is laughable - this is purely people not driving to work, which is by far where most of the gasoline based miles come from.

Consider something else - the 1996-7 population was a helluva lot lower (too lazy to look but 10+ percent seems about right) than it today as well.

This here is a massive deflation 'hint' - and it completely blows a hole in the dot-gov fake stats bull****. Methinks the end(game) is near.

Trading my Yukon (15 mpg) in for something that gets over 30 mpg. I have a feeling more people than you think are doing that. I will buy 600 less gallons per year since I drive 18000 miles per year.

You know, Obama and the Hopiums are going to claim this is due to their "Green Energy Initiatives".

Mark my words.

^^+1 Weezie

I can already hear...

..Americans are making great strides, but we can do more. That's why today I would like to announce my....

Keep in mind that a lot of low mileage vehicles used for construction are not in use and more and more people are driving cars like Civics, Hyundais, etcs and mpg for virtually all cars has gone up (and cash for clunkers took a bunch of junk ones off the road). Throw in increased online shopping plus $3.50+/gallon and I am not surprised. I don't see signs pointing to a recession based on the retail #s I see internally and externally, although margins are certainly an issue.

Economic, technological, and social reasons.

Less people going to work in general. Less gas.
More people are working from home. Less gas.
Less people can afford to***** away 3 dollar gas. Less gas.
More miles per gallon from newer vehicles. Less gas.

And yet, gasoline prices around here are $3.59/gal today. They were around $1.75 about 3 years ago.

Quote:

Travel on all roads and streets changed by -2.3 percent (-6.0 billion vehicle miles) for October 2011 as compared with October 2010. Cumulative Travel for 2011 changed by -1.4 percent (-36.0 billion vehicle miles)

I wonder if these numbers are based on 100s of thousands of 55-62 year olds that the BLS assumed were dead but the Census discovered were alive?

Trick question! Everyone knows the FHA maintains it's own birth/death models /sarc

In a first, gas and other fuels are top U.S. export

For the first time, the top export of the United States, the world's biggest gas guzzler, is — wait for it — fuel.

Measured in dollars, the nation is on pace this year to ship more gasoline, diesel, and jet fuel than any other single export, according to U.S. Census data going back to 1990. It will also be the first year in more than 60 that America has been a net exporter of these fuels.

http://www.usatoday.com/money/industries....

This is going to show up in GDP. They cannot game all of it out. If you look at historical correlations we could easily see a -2% negative print. If that is going to happen it is going to start registering in the markets immediately.

"It's all those Chevy Volts on the road."
Can't be, Fire trucks would have offset the number;-)

Exporting gas? Kind of like the Potato Famine.... they had pleanty of potatos and food, but they exported it in exchange for cash.

Yes.... deflation. Cash is king.

Smartmoney2 wrote..

For the first time, the top export of the United States, the world's biggest gas guzzler, is — wait for it — fuel.

From a long term macroeconomic viewpoint this is good.

We've spent decades shipping dollars overseas to buy raw materials and now foreigners want something valuable in return so we're giving them finished product.

If that process makes things difficult for domestic customers we should blame the people who created all that new currency at a rate that exceeded GDP growth.

A lot less miles flown as well since carriers have dropped a lot of routes. I would think gas prices will continue to rise as demand falls to pay the debt that hasn't gone away.

Zerohedge a couple of days ago noted that the actual number of people 'employed' was the same as in 1996-1997.

(ZH also noted that the population is up roughly 30 million since that time).

This article says that the actual number of gallons of gas used is the same as in 1996-1997.

Do the math - really - it's not that hard.