Report: Consumers Buying more Gasoline
Submitted by
CalculatedRisk on Tue, 12/09/2008 - 4:28pm (77 comments)
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It's Peak Oil. Just a temporary retracement.
No big surprise. Heck, oil is down 2/3 from its speculative highs.
With the prices down below $2.00 and in some places, as low as, $1.50, did we think everyone would just sit home and watch American Idol reurns?
Paradoxically, miles driven lowered at the same time, indicating that these consumers are putting their gasoline purchases to non-traditional uses, such as burning down their homes for insurance proceeds.
No job to go to, no money to spend at the mall. I'll just drive around.
Go long firehoses.
Nuts.. should have gone long Humvees and Escalades - they were all dirt cheap!
We're halfway home. Now we just need Treasury to help re-open the MEW ATM so everybody can start buying SUVs and Hummers again. Problem solved!
killin me hoops.. LOL!
Seems to me that particular week would get a natural boost due to the Thanksgiving holiday travel, no? I'm sure there's a boost due to gas prices dropping, but mabye that week isn't the best datapoint...?
No mystery, Easter 27 April 2008. Thanksgiving 27 November 2008.
How exactly does MC know exactly how much gas was bought? Shouldn't they just get "$x was spent @ gas station y" type of data?
This year the week ending Dec. 5 included part of Thanksgiving weekend; not so last year. Don't know exactly how that would affect driving, but I'm sure it had more than 0.3% impact one way or the other.
In other words...a noisy data point.
a typical tank trailer has a capacity of approx. 6k gallons so demand increased about 5 trailers a week ...doesn't seem significant... or did I read the #'s wrong
False premises, false conclusions.
The December 5 week is not a "normal" week; it's the week after everyone drove around a lot for Thanksgiving family visits and whatever is left of the pre-holiday shopping tradition.
Show me more than a single misbegotten data point, please!
CR - You are assuming that they are buying (more) gas to drive, no?
Not that any responsilbe person would try to resolve their mortgage problems with a couple of litres, right? Hoops, comment?
@transient - I think if you add in average cost/gal on nat'l basis then they can approximate gallons consumed.
/Just filled up for a $1.54/gal. and burnt rubber for 100 feet leaving the station to celebrate....
" dr munch writes:
No job to go to, no money to spend at the mall. I'll just drive around.
dr munch | 12.09.08 - 6:42 pm | # "
Now you're thinking like a Californian.
But if spend more money on gasoline will I also spend more money on non-gasoline destinations to start buying enough consumer crap from china to restart both economies?
Probably not. Just means I do not have to ride the bus with those poor people anymore.
[Show me more than a single misbegotten data point, please!
Wisdom Seeker ]
Are you suggesting price doesn't affect consumer demand? cmon. Econ 101 still applies in soviet 'merica.
Isn't the extra gas for all the visits to the employment office?
Where are they driving? Work? Malls? Vacations? Unemployment office? Open houses?
How much of this gasoline was Chrysler's $2.99/gallon special?
Isn't the extra gas for all the visits to the employment office?
In a related note, sales of 55 gallon steel drums surged.
I still recommend hijacking ethanol tankers, de-denature the contents bottle in quarts and sell for $5/ea.
Pity to burn the stuff.
Pseudo Eponymous, but how do they know how much was for gas, and how much was for twinkies in the store?
Max writes:
Isn't the extra gas for all the visits to the employment office?
In a related note, sales of 55 gallon steel drums surged.
... and soon people will begin hoarding glass bottles and rags
Illinois governor free on $4,500 bail after arrest
I still have some $4/gal gas left in my Tahoe. Uncle Sam still has some $140 oil left in SPR so I don't feel too bad.
Proof the USG can't get anything right. They should have begun SELLING above $100 to put a lid on prices and capture gains. Instead they pushed it higher and stuck us with it 2 ways.
J Smarter than Taleb, faster than A a phone call from Paulson, more S powerful than a speeding pirate.
Someone, I think it was Pookie, posted something I thought was interesting the other night.
She, and her husband, early 60's, own 5 gas stations. Her point was high prices were bad. Low prices are going to put them out of business. They but the gas and by the time it arrives they have already lost money.
They but? They purchase.
In Soviet America, gasolines burn YOU!!
It's so great that prices are low. It allows people in my area to drive their GIANT TRUCKS & SUV'S like Madmen.
How enjoyable it is to step on that gas peddle, so I can make it to the next red light a couple of seconds quicker. And there is no substitute to being able to go 90 MPH in my F-950 down the freeway.
Frankly, I wish that it were back to $5.00/gallon, so people wouldn't drive like crazy folks, especially on surface streets.
Broward. Whats a good book about memes?
Illinois governor free on $4,500 bail after arrest
there's just something wrong with the bail is less than the the Ebay bid!
http://cgi.ebay.com/ONE-1-ILLINOIS-US-SENATE-SEAT-FOR-SALE_W0QQitemZ170286149703QQcmdZViewItemQQptZLH_DefaultDomain_0?hash=item170286149703&_trksid=p3286.c0.m14&_trkparms=72%3A1205%7C66%3A2%7C65%3A12%7C39%3A1%7C240%3A1318%7C301%3A1%7C293%3A1%7C294%3A50
.
Good idea, t-j-, to stock up on gas at these low prices for future Molotov cocktails. They will make a perfect complement to the pitchforks when we storm the walls of The Fed.
When we get there, Ben, save us the drama and c'mon out and play!
I did have a nice drive up to the lake in my V8.
Premium @ Costco was $1.799
Bh - hilarious! Love this one liner:
"I'M NOT DOING ANYTHING ILLEGAL EBAY!"
I'm looking for a "washout" in crude this week. Test last weeks low, reject it, and close above it. DXO is the 2x long (USO is the 1x). Only looking for a counter trend bounce (as little as 20% as much as 100%).
OT - Anyone have Cobra's e-mail address? A friend has a question about some FL real estate; I advised him to wait or only go after foreclosures. But he's offering me free hair cuts for a year if I can find him some specific info.
Broward. Whats a good book about memes?
I wrote the book, baby.
http://www.realmeme.com/Main/theory101/index.jsp
You can reference Dawkins's original work but it's all theoretical, and mostly noun-based, not verb-based (i.e. action-oriented).
I doubt if any of the search engine companies are publishing their material. There's a lot of forensic and search manipulation material (mostly Google-based) at Defcon now.
DEF CON® Hacking Conference - Archives of Past DEFCON Content
.
"But he's offering me free hair cuts for a year"
Persecuted Comrade Anonymouse
Join the club - there are many US taxpayers, homeowners, and investors who have got free haircuts in the last few months.
You could always ask lawyerliz, too
When did we start having to put a valid email address in?
Yahoo News says "Obama seeking to distance himself from Illonois Gov."
No kidding...
I believe the good governor's quote after making bail was that " he always pursues legal business opportunies"... anything can feel legal as long as your willing to twist your ethics
transient:
Mastercard gets the actual gallons pumped data. What you see on your printed receipt is included in the transaction record. They don't have to extrapolate.
O/T
Speaking of kidding, has Bushie given any pardons out today?
OT - Anyone have Cobra's e-mail address? A friend has a question about some FL real estate; I advised him to wait or only go after foreclosures. But he's offering me free hair cuts for a year if I can find him some specific info.
You kidding? Put him in touch with Kristina,...she may not know about real estate but he'll have more fun.
transient writes:
How exactly does MC know exactly how much gas was bought? Shouldn't they just get "$x was spent @ gas station y" type of data?
transient | 12.09.08 - 6:51 pm | #
Good question. When I buy Cigarettes @ Racetrack it shows up as gasoline and I get double cash back when their promoting double points on gasoline. It also shows up as a gasoline charge.
OT - Anyone have Cobra's e-mail address? A friend has a question about some FL real estate; I advised him to wait or only go after foreclosures. But he's offering me free hair cuts for a year if I can find him some specific info.
Or LawyerLiz
twist your ethics
toyotaJoe
Here is a twister: If you work with your insurance adjuster and make kickbacks to enhance the claim it is fraud. If an Adjuster works for Insurer and makes kickbacks, it is legal - go figure!
@bearly "Are you suggesting price doesn't affect consumer demand? cmon. Econ 101 still applies in soviet 'merica."
You've forgotten that demand also affects price. There's a reason why the prices are still falling...
Doesn't elasticity factor in there also ...I can't remember
threads up
get your boards out of your woodies!
Didn't mean to hijack: Cobra, LawyerLiz, Kristina, or anyone who can give me advice about foreclosures in FL real estate: chuckmertz at hotmail.com (thanks)
Anyone know whether MasterCard has access to all gasoline purchase transactions, or just their own cards'?
Another interpretation of this data could be that folks are charging a larger share of their gasoline purchases ... because with the holidays, they're out of cash or other options?
The MasterCard fuel consumption must be based on a GUESStimate, based on card use. One alternative is they have inside news from fuel tax revenues, that are collected at the refinery. The other alternative is that the MC folks have (through some sort of sharing agreement) acquired similar purchase data from all other cards. (An arrangement i've never previously heard about.)
There is no purchase data in California that shows consumer gasoline purchases (dollars or gallons) that are exclusive of other Convenience-store purchases. All published sales data (gallons)is from refiners, that report in-state shipped quantites, and out-of-state shipped quantities -- all for the purpose of excise tax assessments.
Bottom line: IMO the MC number is very fuzzy.
Now is a great time to buy or sell a barrel of oil.
A friend has a question about some FL real estate
It's still overpriced,
expensive to insure,
prone to alligator attack,
and soon to be reclaimed to the sea thanks to rising ocean levels.
but then, now that I remember the beaches, I...
JIZZED..
IN..
MY
PANTS.
My wife is a real estate agent. Until now our area has been really busy. That probably won't continue. If gas hits a dollar a gallon this summer I think it will be time for a cross country road trip. I'll just map out vacant exurbs and we can bando our way across the country.
$20 to fill up my tank...
"Are you suggesting price doesn't affect consumer demand? cmon. Econ 101 still applies in soviet 'merica.
bearly | 12.09.08 - 6:56 pm | #"
I would argue that 4$ gallon gas, you neighbor losing his job and house, has scared J6P and the super-rich shitless and they are now hunkering down until there is some light at the end of the tunnel.
So, yeah cheap gas would eventually result in greater demand, but the shock shows no sign of wearing off yet. 0% T-Bills, anyone?
"Bottom line: IMO the MC number is very fuzzy.
ChefVisar | 12.09.08 - 7:22 pm | #"
Any fuzziness to this number is outweighed by the ASTRONOMICALLY INSANE sample size.
They are buying all the gas on the card because the bank debit card is kaput. Credit is king but the queen (repayment) is a bitch.
Not me . Enjoy driving less and hate traffic .
Gas is $1.29 in KC. Down from $4.19 in July.
Oh, and don't use gas to torch anything. Try 2 qts oil based stain, 1 qt paint thinner and 10 lbs sawdust in a galvanized metal container (trash can), a legitimate woodworking project or "home improvement" gone wrong...just saying, I've never tried it though...
Finally, I can start driving the Denali again and my family has some leg room. I was starting to think that if we had to take another trip in our tiny Prius that I was going to put an end to family trips.
I am thinking of selling both though and doing the "green thing", picking up a Cadillac Escalade Hybrid.
Thats not real. Its only up because they are driving to JOB INTERVIEWS.
U.S. gasoline demand rose last week for the first time since April as prices at the pump fell further ... Motorists bought an average 9.331 million barrels of gasoline a day in the week ended Dec. 5, up from 9.302 million a year earlier...
It sounds like we have a market-clearing price for gasoline now-and a crude oil price by extension-in the short run. Lotsa variables in play here- need to look at discretionary income changes and the changes in the mix. Need a comparison of the pie-chart of disposable income one year ago versus NOW, along with the size of the pies before and after.
It is nice to be able to drive around chicago for about 10 dollars. This summer was hell and I'm not looking forward to the prices going back up. They will go back up in the future hopefully not the near.
9.331 million gallons - 9.302 million gallons comes to 0.029 million gallons, better known as 29,000 gallons. Which strikes me as not that much more than a drop in the bucket. Which means everyone used about an extra shot glass of gas over this time last year. Perhaps I'm not seeing the big picture, but is this difference actually meaningful?
Aha! We had a late Thanksgiving week this year. Some of that gas consumption was counted when people returned from Thanksgiving weekend. Thanksgiving holiday is the most heavily traveled holiday of the year. CR, the stats are skewed! Need to look at the week of Dec. 12th (next week), in comparison to last year.
Jes writes: 9.302 million gallons comes to 0.029 million gallons, better known as 29,000 gallons
My thoughts exactly. That volume will fit into a cube 5 meters on each side. Barely statistically significant, it would seem.
Multiply it by 42.... barrels not gallons....
accelerant for the ol' residencio. Nothing like the smell of fresh insurance payoff in the morning. Only way to make money in real estate now.
Hey, those U-Hauls won't haul themselves.
$1.49/gal
Time to try to propose a gas tax increase.... and hear the right scream about "hurting the economy" and the left scream about "hurting the poor" and.... aw, forget it. Good old Molly Ivins and her "you can't get elected dogcatcher in this country with a sensible energy policy".
The sad thing is the same economists will come out against it who were telling us that $3.00/gal gas wasn't a problem because America is so efficient or something. Remember them? I bet they are still on your TeeVee.
Since Thanksgiving, I'm observing more people out driving and hitting the discount retailers. It's not a great rush, but the closer we get to Christmas the more people are out. Higher-priced merchandise at the deeper discounts seems to be moving, but the recent influx of cheap stuff into Wal-mart (sort of like Wal-Mart used to have) doesn't seem to be attracting any interest.
It's not like last spring before the downturn, but traffic is picking up. I don't see many people in restaurants, though. Local stations here in the Knoxville, TN area can be as low as $1.34 for regular. I do think lower gas is giving people some breathing room and they are taking advantage of it.
Gasoline is reformulated for the winter months to reduce pollution. The reformulated gas gets fewer mpg than the non-winter formula. I believe the reformulation has already happened due to the decrease in mpg I've seen in my car.
Miles driven should be the real indicator, is there a reliable indicator of that number? Otherwise reformulation alone could easily account for this increase in gas purchases.