I have been wondering if EIA's seasonal adjustment factors are getting out of whack. They keep saying we have don't have enough gasoline. I see no shortages anywhere. The doomsters cling to a single station closed in Missouri etc., when there are 200,000 gasoline stations n the USA.
Another query: If the EIA keeps warning about low supply, do station owners "top off" their tanks more than otherwise? I would, if I were a staion owner. So, do we have additional days supply in station tanks?
Lastly, as pointed out here, gasoline demand may finally be cooling off. Year-over-year increases in demand are shrinking. Given new models of cars have higher MPGs, we may be at the inflection point. Demand will start going down in the future.
When gasoline hits $4 a gallon ($1 in 1979 dollars) then we probably will see a big consumer shift. Back in 1979 we saw it. Gasoline is now $2.65 a gallon in Los Angeles. Much cheaper than 28 years ago.
You really can't criticize consumers for responding to price signals. The price signal today is that gasoline is not scarce, and takes an even smaller fraction of income than in 1979. Nevertheless, thanks to improving technologies, we are seeing demand flatline.
I suspect we will ease into an era of annual and secular declines in gasoline demand very soon. Since our refinery capacity will be bumped up slightly, I think we are nearly though the woods now. Worldwide refinery capacity is rising rapidly, and is predicted to actually glut markets by 2010.
Addtionally, in a couple of years, ethanol will male up 6 percent of US gasoline by volume, and it is not counted in the EIA survey.
I, too, would prefer a little more cushion than we seem to have now (I am still skeptical about the EIA seasonal adjustment factors). But, hey, there seems to be plenty of gasoline.