Yesterday’s DOE Report Had Some Of The Worst Demand Figures Of The Year For Refined Products

Yesterday’s DOE report had some of the worst demand figures of the year for refined products, and huge inventory builds, and yet the market seems to have dismissed those figures as seasonal/holiday anomalies that don’t change the outlook for 2022.

A 16% drop in the DOE’s demand estimate for gasoline on the week was certainly eye opening, but when you look at the seasonal charts and remember something like this happens every year, it becomes less worrisome. The 10 million barrel build in gasoline stocks was the 3rd largest weekly increase in the past 20 years, and the largest since the country went on lockdown in the spring of 2020. Despite that big increase, total gasoline stocks remain below their 5 year average for this time of year, which helps to explain the muted reaction to the dramatic numbers. 

The DJIA had a 550 point reversal lower after reaching a new record high just shy of the 37,000 mark Wednesday as the FOMC minutes reminded the market that the money printing presses are shutting down. We did see a brief selloff in energy prices post-settlement in sympathy with the drop in stocks, but that move proved to be short-lived as the buyers stepped back in quickly overnight.

Click here to download a PDF of today's TACenergy Market Talk, including all charts from the Weekly DOE Report.