A barrel saved is a barrel earned. The oil market continues to ignore record supply and deep demand drops and instead chooses to focus on some better than expected earnings. All right I admit they were not just better than expected but much better than expected and the mood on the street is very upbeat.
Right now oil cares more about Wall Street then it does about Main Street. Oil moved more to the tune that the stock market is playing as opposed to the current normally bearish song called supply versus demand. Even today on the front page of the Wall Street Journal they are reporting on the peak of gasoline demand in the gas guzzling United States of America and the historic shift that we have seen on the oil and gasoline front. The Journal says that the US oil industry is bracing for a drop in the US thirst for gasoline demand and there are many reasons for it. Some of the drop is due to the way Americans live and the transportation that they choose. There is also a growing emphasis on alternative fuels. The result they say could be profound transformations, not only for the companies that refine gasoline from crude oil, but for state and federal budgets for consumers. The Journal says that the recession is curbing US gasoline consumption, as laid off workers stop commuting and budget conscious families forgo long road trips. Drivers filled their cars with 371.2 million gallons of petroleum based gasoline every day in 2007, according to the US Energy Department. It expects that to fall to 6.9% to 345.7 million gallons in 2009, as demand and the use of plant-based ethanol increases. Even if usage climbs after the recession ends, it won’t exceed 2007 levels.
That does not seem to register with a market focused on the hope of a faster than expected economic rebound and the growing trend of commodity prices inflation.
