Very brief update. First, I just came back from the hospital, where they extracted a small boulder from my kidney. With that, I put this horrible episode behind me.
On the inventory report, I don’t think this bodes well. I had seen some predictions just before the report was released that the gasoline build was expected to be 4 million barrels. The reported build was zero, which is consistent with what I wrote last week about inventory builds slowing in June before falling in July and August. But refinery utilization and imports both fell a bit. If those trends don’t reverse, the recent price drop will change direction in short order.
And now, I really am on hiatus.
As I indicated earlier, I am about to take a break from writing. Therefore, this will be my final TWIP for a while. Furthermore, I have just gotten news that I am to report to the hospital on Wednesday for final resolution of my kidney stone. It was a great relief to hear that I will get this taken care of prior to my flight back home. But, it will mean that I will be unable to update this after the report is released on Wednesday.
I think this week’s TWIP will provide a good indication of how the summer may go. As I pointed out last week, gasoline inventory builds typically slow in June and then start to fall in July and August. However, the high gasoline prices in the U.S. are predictably attracting strong imports (and driving up gasoline prices all over the globe).
I haven’t yet seen any predictions for this week’s report, but last week’s report was confusing. Gasoline inventories swelled by far more than expected, on the back of strong imports. But refinery utilization was down sharply. That is not a good sign. However, I would predict, on the basis of the recent strong import numbers, that we are likely to break the historical trend and continue to build gasoline inventories for the foreseeable future. If the trend continues, then we have probably seen the highs for gasoline prices this year. If inventories turn back down, or a hurricane enters the Gulf of Mexico, then we almost certainly have not.
I will try to update the numbers following the release, but again it probably won’t be until Thursday.