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Gasoline demand is being closely watched as a high-frequency proxy

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Gasoline demand is being closely watched: Sevens Report Co-Editor, Tyler Richey, Quoted in MarketWatch

Recession-wary investors are watching gasoline demand for clues to consumer health

“Gasoline demand is being closely watched as a high-frequency proxy for consumer spending,” said Tyler Richey, co-editor at Sevens Report Research.

In late April, U.S. economic data had been “coming in with a whiff of stagflation and the plunge in consumer demand for fuel amplified those worries,” said Richey.

“Worries that we could see a similar drop off in economic activity amid the onset of the long-discussed post-COVID-stimulus recession were recently reignited by the combination of stagflationary economic data and the high frequency drop off in gasoline demand,” he said.

The nearly 8.8 million bpd “gasoline supplied” figure marked a rebound to top the four-week moving average of 8.53 million bpd, and it was above the 2024 average weekly rate of 8.57 million bpd, according to Richey.

Going forward, “keeping an eye on the weekly gasoline supplied figure as a proxy for consumer demand for gasoline will be critical, especially relative to its four-week moving average to gauge the underlying trend in fuel demand, and compared with prior year’s levels for the corresponding reporting week,” Richey said.

“If we see demand roll over again, expect recession fears to rise and volatility across asset classes pick up, including renewed pressure on oil prices now that the geopolitical fear bid has largely gone stale,” he said.

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Tom Essaye Quoted in Barron’s on August 9th, 2023

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Oil Stocks’ Gains Have Lagged Behind Crude. That’s a Bad Sign for the Shares.

“Consumer gasoline demand has collapsed at a record pace in recent weeks,” wrote Sevens Report’s Tom Essaye, who noted that crude is likely to fall from $83 if demand doesn’t soon stabilize. Click here to read the full article.

Market Multiple Table: March Update

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What’s in Today’s Report:

  • Market Multiple Table: March Update

U.S. futures fell sharply overnight following Russia’s threat to shut the Nord Stream 1 pipeline and the U.S. expressing a willingness to ban imports of Russian oil. But reports of successful evacuations from Ukraine through a corridor agreed upon with Russia has sparked risk on money flows in pre-market trading.

Economic data in Europe was generally good o/n with German Industrial production topping estimates while Eurozone GDP met expectations. Domestically, the NFIB Small Business Optimism Index fell to 95.7 vs. (E) 97.1.

Today, there is one economic report to watch: International Trade in Goods & Services (E: -$84.0B), however, it should not move markets, while the Treasury will hold a 3-Yr Note auction at 1:00 p.m. ET.

Bottom line, the market is attempting to stabilize this morning following yesterday’s route, but for the market to bounce further, we will need to see meaningful de-escalation between Russia and Ukraine over the course of the day.