BofA Stunned By Drop In Gasoline Demand: “Where Is Driving Season?”
zerohedge.com / by Tyler Durden / Jul 8, 2017 7:04 PM
Exactly six months ago, when oil bulls still held on to some fleeting hope that OPEC may somehow stabilize the crash in oil prices despite the shift in marginal oil production from low-cost OPEC producers to US shale (a hope which is now gone as the just disclosed letter from Andy Hall demonstrates), Goldman noticed something troubling: an unprecedented collapse in gasoline demand. As the firm’s energy analyst Damien Courvalin said on February 8, when discussing the 6% fall in US gasoline demand, such a plunge “would require a US recession” and add that “implied demand data points to US gasoline demand in January declining 460 kb/d or 5.2% year-on-year. In the absence of a base effect, such a decline has only occurred in four periods since 1960 during which time PCE contracted.”
Now, 6 months later, the situation is very much different: with the US now inside peak summer driving season, the cyclical drivers behind gasoline supply and demand are vastly different, and yet something has remained the same: gasoline demand in the US simply refuses to rebound, surprising analysts by how weak it is. So weak, in fact, that Bank of America has released a note which, like Goldman half a year ago, reveals confusion about why – if the economy is indeed strong – demand hasn’t kept up and has prompted BofA’s energy analyst Francisco Blanch to ask “where is the driving season?” and, more specifically, “is this year’s driving season over before it began?”
The post BofA Stunned By Drop In Gasoline Demand: “Where Is Driving Season?” appeared first on Silver For The People.
Source: http://silveristhenew.com/2017/07/08/bofa-stunned-by-drop-in-gasoline-demand-where-is-driving-season/
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