Might a Gas Shortage Be Around the Corner?
I know this is not the heavy driving season. I'm also aware that Americans seem to be cutting back on the number of miles they are driving. Both of which would seem to indicate a reduction in gasoline demand. At a time of lower demand, one would expect gasonline in storage to be on the higher side of average, correct?
Well, per the EIA, gasoline stocks are now pegged right at the bottom of the 5 year average range for this time of the year. Check out the graph:
The 5 year average range is represented by the thick blue band. At a time of the year when gas stocks should be growing, it looks like that is not happening in 2006. Why?
Lo and behold, demand is running high. Much higher than last year at this time, which appears to have taken a bite out of gas in storage:
Also, American gas imports have fallen significantly:
I'm going to bet that the reason Americans drove fewer miles in 2005 had more to do with massive hurricanes than anything else. Let's be honest, Americans are driving more than ever and consuming more gasoline than ever.
The gasoline supply chain is so huge that even at the bottom end of the 5 year range, the US currently has a 21 day supply of gas products in storage. Bottom line: no shortage around the corner ... but probably higher prices around the corner.
