Thursday, April 16, 2020

Two Charts Worth Noting

April 16, 2020

Here are two eye-poppers, which are in the WEI release for this week but deserve highlighting.

The first is end sales of gasoline, diesel, and jet fuel, computed using Energy Information Administration on refined product production. Gasoline supplied is down by 46%, and jet fuel supplied is down by 52% since March 6. Some of that has been put into inventories (those tanks you see at wholesale distribution outlets, a.k.a. terminals or "truck racks"). Once you adjust for inventories, end sales are down roughly 50% yoy (52-week percent change).

Fuel Sales to End Users and Retailers, 52-week percent change, through week ending April 11.

These are sales end users and retailers (gas stations, truck stops, and large end users who purchase wholesale like jet fuel suppliers at airports and fleets like UPS and the Post Office). There is an additional layer of inventories you don't see in these data - fuel stored in the tanks at airports, gas stations, etc. - so this series isn't quite equal to final fuel consumption, but it is close. My (evidence-free) guess is that most end user tanks are by now pretty full because of the unexpected decline in consumption combined with topping off because of very low wholesale prices In any event, the decline (plotted along with the WEI) is stunning, and far exceeds anything in the financial crisis.

The second chart is raw steel production (from the American Iron and Steel Institute), which is down 34% yoy. This decline isn't (yet) as large as in the financial crisis, but is an enormous drop for such a short period of time. Capacity utilization was at 56.1% for the week ending April 11, compared to 81.3% for the same week last year. 

Raw Steel Production, 52-week percent change, through week ending April 11.

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