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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.

Also, click here to view the full MarketWatch article published on May 9th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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