Tuesday, May 3, 2016

Gasoline demand is way up

EIA is reporting that gasoline demand in the US is over 9.2 million barrels per day. The fact to note is that the summer driving season does not start until Memorial Day and that the 9.2 million barrels per day of demand is a 40 year record for February. Gasoline demand typically spikes during the summer as people take vacations. The rising demand coupled with lower supply should lead to drawdowns in storage.

Another data point is that the rig count continues to trend lower. This will have a more delayed effect but eventually supply will reflect less wells drilled.

Rig count continues to decline as there is no incentive to drill at these prices

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