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256 comments on DrumBeat: December 7, 2006

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Leanan on December 7, 2006 - 11:56am Permalink | Subthread | Parent | Comments top

The last page of the perpetual inventories thread at PO.com has some interesting discussion.

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Robert Rapier on December 7, 2006 - 12:15pm Permalink | Subthread | Parent | Comments top
That last poster had it right. This has been turnaround season, which is usually a period of light demand. However, we had record demand this turnaround season, which drew inventories down. The surprising part to me is that refinery utilization was back up over 90% this week, and inventories were still down.

However, gasoline doesn't get into the system as soon as refineries come up. So, next week may be a better indicator. If refining capacity stays above 90% and gasoline inventories are still falling, buy gasoline futures.

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neuroil on December 7, 2006 - 1:34pm Permalink | Subthread | Parent | Comments top
coefficient of correlation between API and finished gasoline stock on the monthly data from EIA=0.81. This doesn't mean that decreasing API is the cause of the decrease in finished gasoline stock but it could contribute to the problem. The current upgrading of the refinery units should fix the problem but I hope total capacity is sufficient for an ever increasing consumption.
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256 comments on DrumBeat: December 7, 2006

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