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112 comments on Another picture that tells a story

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TRE on April 20, 2006 - 12:48am Permalink | Subthread | Comments top
It would be way cool to see some of these charts with a vertical axis that describes number of days the stocks will last for the consumption rate at that time, e.g. by combing a particular stocks chart with the demand chart.
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Oil CEO on April 20, 2006 - 5:21am Permalink | Subthread | Parent | Comments top
See below. The Chart Fairy strikes again.
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TRE on April 20, 2006 - 10:11am Permalink | Subthread | Parent | Comments top
Thank you Chart Fairy (or Oil CEO).  One other way cool consideration:  trend line (curve fit, least squares, whatever) along with the days of stock.  To highlight the overall trend (which certainly seems to be down).
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totoneila on April 21, 2006 - 8:56am Permalink | Subthread | Parent | Comments top
Hello Tre,

If one considers the ongoing economic drive to optimize just-in-time [JIT] deliveries of fuels to maximize profits, it can be seen in these graphs as increased volativity; the ever wider swings to the outerbounds of normality.  The minimizing of fixed overhead costs; the reduction of the 'safety buffer' of storage facilities to ease the logistics of supply control has not yet been adequately offset by improved comprehensive JIT management.

Perhaps an aviation analogy can best explain the forementioned paragraph. A well-designed plane is aerodynamically stable; it safely flys practically hands-free because it automatically inherently seeks to adjust the control surfaces to reduce airborne volativity.  In contrast, a B-117 batwing stealth bomber is inherently unstable; the onboard computers are constantly adjusting the control surfaces on a JIT basis to keep the craft from rapidly losing control.  This can only be done if the feedback loop system is totally understood and coded into the computers' software.

The top graph [of the posted series of graphs by Heading Out] is the 'flying result' of insufficient JIT logistics management.  If market supply and demand were understood in totality: the 'gasoline plane' would smoothly fly thru the topchart with few undulations, instead of the wild roller coaster altitudinal gyrations we are now seeing.

The mandated switchover to new gasoline formulations, the rampup of ethanol and consequential trucking vs pipeline distribution, the ever-shifting variations of crude inputs to refineries, the erracticness of imports due to weather and scheduling difficulties, and on and on, are starting to overwhelm the 'invisible hand of the market' trying to 'JIT fly' through increasingly bad and evermore volatile conditions.

The ever-cascading feedbacks will eventually make the 'market B-117 pilot' loose control as evidenced by the other posters info where spot gasoline outages are occuring on the East Coast.  As time marches on into the postPeak reality, we can expect evermore gasoline volativity as unforeseen market downdrafts and windshear buffet the energy infrastructure.

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

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