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The spike in gasoline prices motivated Americans to go on buyers’ strike. The phenomenon of a price shock reducing demand for that product is called “demand destruction” in economics. It can reverse when the price falls to such a low level that demand returns. Demand destruction has now turned into a crescendo during peak driving season, including the 4th of July holiday weekend.

In the week through July 8, gasoline consumption plunged by 9.7% to 8.73 million barrels per day, on a four-week moving average, according to EIA data. The EIA measures gasoline consumption in terms of barrels supplied to the market by refiners, blenders, etc., and not by retail sales at gas stations. This was the steepest decline yet so far this year.

Consumption, compared to three years earlier, started dropping in January. At the time, the price was in the $3.30 range:

The average price of gasoline, all grades combined, after spiking by 63% year-over-year to $5.00 a gallon on June 13, has now dipped for the fourth week in a row, to $4.65 as of Monday, according to EIA data. Between 2015 and 2021, the price ranged between $2 and $3 mostly. It was a shock to suddenly see $5. In lots of places, folks saw over $6 for regular.

Summer driving season in the US means gasoline consumption surges, hitting high points around the 4th of July week and then again around Labor Day. In the 2022 driving season too, gasoline consumption had been rising through mid-June (four-week moving average), but less than three years earlier, and in mid-June it plateaued instead of surging, and now consumption has plunged to the lowest level since mid-April.

The red line in the chart below spans July 2021 through early July 2022. The gray line spans the same weeks in 2018 and 2019.

In the week ended July 8, consumption of 8.73 million barrels per day (four-week moving average) was down by 9.7% from the same period in 2019. But in 2021, June through December 2021, consumption tracked fairly closely the consumption in the same period three years earlier, in 2018:

This demand destruction of gasoline is happening on a global scale – and it doesn’t even figure in yet a recession, but just price resistance, as buyers go on strike wherever they can.

But in the US, people drive a lot more – whether to commute every day or to go shopping or to go on vacation – and they drive bigger vehicles than in most other countries, and they consume a lot of gasoline, and a spike like this in the price is particularly, let’s say, revolting – and finally motivating.

Consumers are resorting to all kinds of tricks to put a lid on their gasoline expenditures: Drive a little less, take it easier with the gas pedal, cut out unnecessary trips, plan shorter road trips, prioritize the most fuel-efficient vehicle in the garage, use mass transit, etc. These are behavioral changes.

This is the other shoe that hasn’t dropped yet: During big recessions, when a large number of people suddenly lose their jobs, there is somewhat less driving for daily commutes. But no large-scale waves of layoffs have happened so far, and initial claims for unemployment compensation, though they have ticked up a bit, are still very low. If there are big waves of layoffs, it will remove more demand.

This form of demand destruction is relatively short-term: people, in theory at least, can eventually revert to their old habits, or get a new job, and demand starts picking up again.

When people start buying fuel-efficient vehicles and EVs, they’re reducing gasoline demand long-term. If working from home sticks around and becomes the new normal for a larger part of the work force, it also has a long-term impact on demand.

One thing we’re already seeing: Americans are once again favoring smaller more fuel-efficient vehicles, and in terms of new vehicles on dealer lots, they’re nearly sold out.

And people are buying EVs in larger numbers. In Q2, Americans bought a record 196,788 battery-electric vehicles (not including hybrids and plug-in hybrids), up by 66% from a year ago, according to Cox Automotive.

And this occurred even as total sales of new vehicles plunged by 20.8%, and as sales of new ICE vehicles plunged by 23.4% over the same period.

In Q2, EV sales reached a record market share of 5.6% – meaning that 5.6% of the new vehicles sold in Q2, in addition to all the prior EVs sold, don’t use gasoline. As EV sales continue to grow, this transforms into the kind of demand destruction that is permanent, and it has started to be a noticeable factor in gasoline consumption.

The no-growth nature of gasoline consumption in the US became clear after the Financial Crisis. The oil industry has figured this out too. Investment in refineries has stalled. Oil industry executives have explained it many times – you just don’t invest massively in an industry with declining domestic demand. And they’ve been ramping up exports of gasoline.

The industry is trying to manage the decline in gasoline consumption over the next decades by not investing in refining capacity. Whatever the politics of this may be amid these price spikes – with silly media pundits yelling at oil companies to invest more in refineries – this long-term chart shows that refining capacity is not the cause of the price spike, as consumption hadn’t gone anywhere since 2007, and has now plunged to levels first seen in July 1999:

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I’m curious whether the work from home is influential in determining the obvious discretionary purchase of gasoline reflected in the data.

There have been some studies on this, which found that working from home cuts down on driving. People still drive, but not as far and not as often.

What if the spike in disability claims are valid? Wasn’t Ed Dowd saying that something like a million more people were on disability? Mortality and life insurance payouts are up too. So incrementally more deaths and more people incapacitated = less demand for gasoline.

“Wasn’t Ed Dowd saying that something like a million more people were on disability?”

That’s more internet BS — if he actually said that. Why are these gurus out there spreading lies? All they have to do is look it up. The number of people on disability payments has been dropping for years. You can just look that up on the website of the Social Security Administration. I have no idea why these morons spread such falsehoods.

Excess mortality is a factor in everything, including consumption, housing, etc., but a substantial portion were older people. Not sure what impact that has on gasoline consumption THIS JULY, but didn’t seem to have any impact last fall.

There’s a backlog of 1.1 million applicants for Social Security Disability payments. (source: https://tennesseelookout.com/2022/05/13/delays-in-processing-disability-applications-impose-significant-hardships-in-tennessee/). Last month, 41,016 folks were added to the rolls, and 71,048 were removed. So disabilities could be increasing even tho fewer people are getting payments. I do not recall where Dowd gets his data, but we can see from BLS (Current Population Survey) data that working age (16-64) population with a disability increased from 14,826,000 to 15,586,000 between 2020 and 2021 (annual averages), while nondisabled working age population declined. (source, Dep’t of Labor press release USDL-22-0317). Assuming that you trust the data source.

Even if there is a delay in processing the applications, the number of applications has been going down too. The chart below is from the SSA. It shows the applications and awards.

The BLS doesn’t track disability claims. It sends surveys to households and takes in the responses into its data.

From the SSA: https://www.ssa.gov/oact/STATS/dibGraphs.html

I’d also bet that people on disability are the least likely to drive and the most likely to die from C-19.

Wolf: “I have no idea why these morons spread such falsehoods.” Sure you do, because it makes their readers feel comfortable by not challenging anything that they already believe to be true. Also it makes them more money. Why is Peter Schiff always hawking gold? Oh, look, he has a business storing physical gold!

Hey Wolf I’m not going to say you’re wrong but a completely different dataset can be found from https://fred.stlouisfed.org/ search disability claims for people over 16.

You said “a spike in disability claims,” and there is no spike in disability claims, that’s just BS, and the number of people receiving disability has been going down. The data at the St. Louis Fed about disability claims says exactly the same thing because it is taking the data from the Social Security Administration.

Disability claims and disability benefits are under the the SSA, not the St. Louis Fed. And here is the data from the SSA. Go look it up:

https://www.ssa.gov/oact/STATS/dibStat.html

So what’s the deal with huge profits by the oilers? If demand has been weak for a long time, and thus there’s no need for more refineries, why did the price balloon so much? Sounds to me like the prices were artificially high. That explains the huge profits. And the inflation created by intentional scarcity. This was monopoly manipulation all along.

That’s what you get when the “inflationary mindset” kicks in. I’ve been calling it that since February 2021, because that’s what it is: people pay whatever.

Back then it was used cars and new cars, which are among the most discretionary purchases; people don’t have to buy a car today, they can drive what they have, but they did buy, and they paid whatever.

Gasoline is less discretionary, but there is still a lot you can cut out. Now we’re seeing some price resistance, but still not enough.

This inflation is DEMAND driven, from “free money”: stimulus, money-printing, and interest rate repression.

It isn’t reducing traffic congestion where I live. I haven’t noticed any difference when I go into work or errands during the week. The Whole Foods shopping center near me is more crowded in the day during the week than weekends. I notice it when I go out during lunch hour.

Until Whole Foods stops being so busy, there is far too much money in the economy.

To me when they start feeling it, recession has arrived.

I go to WF during non-lunch hours. Last time there two checker lanes were open at 2 pm. Plenty of parking. It’s been like this for months. Greatest economy ever, Old Joe said not one month ago.

Our Costco, which is one mile from our house, was packed to the gills with shoppers Tuesday at 11:00 AM. Their gasoline center had cars in line waiting for an open pump and there are eight pump lanes with two pumps in each lane.

Since I am retired, I thought Costco would be “light” of shoppers on Tuesday morning (Hah!). No recession around these parts (North of Houston, TX).

While gasoline prices are about $4.00/gallon now (87 octane) and diesel is still $5.00/gallon, it’s not evident to me that traffic is reduced. But I am in a very busy and populated area.

We’ve been having Whole Foods delivered since COVID but have been going in ourselves more often now. Our spending has gone up in the last few months, though we haven’t changed out habits. I see inflation when I do our budget. So now we are changing some habits.

I’m guessing the ALDI parking lot is a better indicator. That place is cheap, so when it’s parking lot fills up you know people are cutting back. The Whole Foods crowd will be the last to cut back.

All you’re seeing is that people are still going to work.

Also, “data” is not the plural of “anecdote”.

Absolutely the work from home has a big impact on fuel consumption because that fuel is nondiscretionary so to speak. very interesting in the dramatic nature of the change. Another component is the missing employees from the charts that Wolf published on employment numbers. Employees count from precovid have not returned.

Yeah that’s the wild-card, from our limited experience at least a lot of workers aren’t returning because they can’t, a lot from long COVID or damage to their organs even if long COVID didn’t get diagnosed. And this is referring to vital organs, ex. a lot of people with ongoing clot issues or their heart rhythms off, brain fog (a terrible thing for anyone working in IT) making it hard to do intellectual tasks, fatigue and lung problems making it hard to breathe, livers messed up that look like alcoholics. The scary thing is this is all happening not in already sick or unhealthy, obese workers about to retire who wound up in the hospital–we’ve been seeing this in very young, fit, healthy workers who even got mild cases.

Our HR and health department is still figuring it out but they’re saying some studies showing like a quarter of people who come down with COVID get things like this, with subsequent issues possibly lasting for a year or two or even longer. And this is with each infection. This is where COVID really is dangerous on a whole society level to the US it’s looking like, it rarely kills young healthy people out-right, but whatever it’s doing, it seems to cause these weird kinds of organ damage in a big percentage of them, like it’s just lingering there or somehow caused some kind of ongoing inflammation. This must be the elephant in the room as far as a longer term impact in the US workforce, and with all these newer pandemic strains going around now, I think BA5 the last one, this may wind up having the biggest impact on the US labor force. And that could also explain why demand for things like gasoline is dropping so much.

This is precisely why I didn’t want catch this “just a ‘flu’” as one of our former presidents described it, and vaxxed up as soon as I was elligible.

Miller/Wolf – So this is considered truth?

My immediate family of five have all had COVID twice with no long-term effects. I also work for a large corporation and there are no reports of such.

I appreciate you clearing up the propaganda but if you want to censor BS, do it from all angles.

Nothing is real if it didn’t happen to you, I guess

Some people in the US can cut energy use a lot if it’s worked at. Fewer trips for supplies, a thing called clothes lines, shorter cooler showers, shutting off unused spaces in the home, etc. I don’t know what the happy medium is for gas prices, but it had better come way down for me.

Brant, you can use wipes in place of short showers. Better yet, stop bathing altogether.

Whole society built on a model of consumption that is, at this scale, ruinous. Ridiculous irrationalities taken for granted as “normal,” even obligatory socially. Herd of fools rushing off a cliff at high speeds with silly conceits, poses, habits and rituals. Truly bizarre to watch at scale.

And don’t repair anything, just throw it out and get the newest, latest version. The US consumer became stupid pigs over the last few decades.

Phleep, if you get rid of the rituals you’d have nothing left.

College suitemate used to take seperate showers just to wash her hair, emulating a Clarol Herbal Essences commercial airing at the time. She was a walking chemical dump of every well-packaged beauty product and magazine rag’s crap lifestyle advice, don’t think she even had her own personality. Frightening in hindsight.

An entire country indoctrinated to seek happiness in consumption has deep rooted effects on behavior and psyche. But if that thought brings you down, there’s always a pill for it. And pills to help with the side effects of that pill. And so on.

It isn’t our country, it’s every country. Fixation at the oral stage. Gobble it all up, without even chewing. Everyone wants to be a member of the Royal Family.

By all accounts, the Danes and most of Scandinavia seem to be pretty grounded and adverse to over consumption.

Ya, I made note of this in Wolf’s previous article. Saw $3.90 for regular unleaded on the way home yesterday.

I was a child in the 1970s, but I definitely remember my parents doing these things. I was talking to my aunt last week and I mentioned that, she said “well, we grew up during the Depression, so we knew how to handle it”.

Anybody born after 1980 has seen a few short recessions. My own kids have never had an actual problem in their lives. I’ve been trying to tell them what I remember of the 70s and I hope it doesn’t get worse than that.

I will admit I don’t understand gasoline prices or a lot of macroeconomics in general. Based on your charts, it’s clear that refining capacity isn’t the issue. But it’s also clear to me that crude prices aren’t either, as they never reached the peak from more than 10 years ago, while gas was substantially higher.

So what was the cause of the $5/gallon gas?

Also, when oil prices dropped into negative two years ago, gasoline somehow stayed positive. It’s a mistery.

That negative oil price lasted for one day and the volume of oil traded at that price was minuscule as compared to the big picture

You frequently show yourself to be not a person to be taken seriously, but you really outdid yourself today.

Taxes at the state level are $1.21 here in California plus $0.18 federal taxes and nearly 100% of the rest of the price is PURE PRICE GOUGING by the oil companies and the refiners which is reflected in their sky high windfall profits these days in the tens of billions of dollars.

Refiner profits? Crack spreads? Greed?

This is what you get when the inflationary mindset gets going and consumer pay whatever. Been saying this since Feb 2021.

If I remember correctly the last new refinery built in the US was in the 1970s. The time to build a refinery can be 5-7 years depending on EPA permitting etc. The payback to breakeven is even longer. While existing refineries have expanded smaller refineries have been closed due to stricter regulations.

Mostly refineries are expanded rather than built from scratch, but Texas International Terminals refinery in Channelview, Texas opened on 1/1/2022.

With auto manufacturers moving to electric automobiles, I’m not sure it makes sense to expand or build any new refineries.

Remember, you still need jet fuel, pitch for asphalt, diesel for marine use, polymers for plastics and lubricants etc. Refineries produce more than gasoline. There are also medical products made from petroleum such as Vaseline etc.

Sanctions of Russia have shifted supply lines somewhat too. Maybe not less petrol and diesel on the market, but it do not flow as it used to. That may have come with a cost, and for sure given reason to raise prices.

It’s the same as with lumber, concrete, steel and so on. When sellers at every level discovered that demand was basically inelastic and raising prices did nothing to reduce demand, they all raised their prices. This happened at the refining, wholesale and retail levels.

Like most industries now… cars, computers, you name it, sales are way down but profits and cash on hand are at all time highs. Get ready for plenty more. If Russia cuts off Europe completely we will blow right through old crude oil and refined product price records, which will raise the cost of almost every other product made, and food.

I just drove by the Roseburg Lumber mill Wednesday and they have at least 10 acres of decked logs. So it isn’t a shortage of timber causing the price spikes. Last summer we drove thru the NW and noticed all the mills had huge log decks.

Refining capacity is part of the issue, as far as I understand. They haven’t been investing in new refineries in recent years, since they see the long-term decline ahead. Why invest in new refineries if the government and the car industry are in the process of converting everything over to EVs on a mass scale?

If people aren’t driving to work, and aren’t being driven to work by mass transit buses, and there are more EVs on the road, how did gas consumption rise to near normal July 2021 to January 2022?

Did all those gas guzzling quad cab pickups and full size SUVs consume the difference?

There are a lot of people driving HUGE 4×4 pickups, but also a lot of Telsas, being driven locally.

How quickly the consumer forgot the $4 peak around 1980, or believed it would never reach that high again.

Correction 2008 not 1980, serious brain hiccup there.

Can’t explain that typo.

couple decades ago RD, I began to notice that I would frequently get the ”year” right,,, but did not get the decade right… As in, 1959-1989 was the reference, but I would say 2009 or some other decade, etc. Not at all sure if this is common for elderly folks, but have at least tried to pay more attention to the decade, since. This was WAAAY before covid.

The last chart shows consumption has been about flat for the last 20 years. We must conclude it would be a lot higher if not for demand destruction of all the kinds wolf mentioned.

Field report from my area. On monday I went to a very touristy coastal area. I’ve been going there for decades. Usually there are RVs everywhere. I think I saw just one the whole day. Much less traffic and the low gas mileage vehicles were left in the driveway.

There have been such a small number of EV’s sold that they have little or no effect. Tesla have sold just over one million cars in the last five years in the USA from a yearly sale of light vehicles over 13 million…

Sometime in the future, maybe but not today….

1m x10 gallons a week is 10,m saved = huge

Hahahaha, BS. Time to wake up. If the active fleet (vehicles that are actively driven and not just parked as a backup vehicle or toy) = 2% EVs, then gasoline consumption is down 2%. That’s a big permanent move in an already stagnant industry.

Does the EV category include PHEVs? If so, gas consumption reduction might only be 1.95%. :-)

49 years ago, in 1973, the world ran out of gasoline. Things looked awful bleak, but Secretariat crossed the finish line in the Belmont Stakes with no contenders in sight and won the Triple Crown.

Big Red lifted everyone’s spirits, and we all lived to see another day.

I’ve got his picture on the wall and two V8s in the garage. Go figure.

There is a marvelous book about another Race Horse having a similar spirit lifting effect during the Great Depression.

You would probably enjoy reading ‘Seabiscuit’ by Laura Hillenbrand.

Too bad we didn’t have a super horse during the Great Recession. Or maybe we did but nobody knew?

Great read. The horse and trainer were both unlikely looking contenders. Biscuit looked like a cow pony on a non too prosperous ranch. The trainer had been a traveling hired- man before being given total control by the far- sighted owner. As Biscuit became a celebrity the trainer would exercise him very early in the morning to avoid press and handicapper spies. Often, Biscuit was not recognized by locals as a race horse at all.

One of the trainer’s rules: Biscuit, who slept lying down, was never to be woken while asleep. Biscuit also liked ladies and an older mare eventually joined him on the circuit, if I recall more as a calming effect.

Biscuit liked to race and if too far ahead would slow down to taunt the contender. As always in life, this sometimes backfired. He was always well behaved at the post- race photo op, sometimes bending forward to munch on the bouquet.

But good God those poor jockeys. I never realized how dangerous this job was/is. For a long time Biscuit had the same jockey, but after numerous injuries he got trampled. Dumped in the back of a pickup and later driven to hospital. And the cheating. Pre- video almost anything went. Jockeys would lash each other, or hook a leg around the jockey’s leg alongside and hitch a ride.

The book builds from Biscuit’s unlikely debut to the ultimate showdown with reigning champion Man of War and his very wealthy owner, who evades the challenge for years.

Well we’ve got AOC but she ain’t lifting my spirits.

In 1979 worked at packing house paid 7.29$ a hour gas was 75 cents ,so today’s wage should be 70$ about 10% of wages

Horse racing is dying as I type, its a money loser almost guaranteed if you own lesser steeds, which is 98% of them.

I am not sure if work from home is responsible for this. If anything, majority of remote workers have been called back into the office (a great culling tactic by employers). Many are hybrid now.

Demand destruction is real and gasoline is one of them. Just the other day a Chinese restaurant in our neighborhood closed after 35 years. They had survived so many recessions and downturns including Covid, but not this time.

The owners could not keep up with weekly/monthly increases in costs of all sorts especially labor.

Someone (I think it was S&P) is out with a research report that the world is going to need twice as much copper in approximately 20 years. I want to do more research in the space. Seems the right copper miner would be a good long term investment.

Evidently it’s nearly impossible to get a big copper mine permitted in USA. Supposedly there is a rich copper deposit in Arizona that’s been trying to jump through all the hoops and is in year 21.

I worked for Anaconda (copper mining and manufacturing) right out of college in 1973. We had mines in Montana and also Chile. In the 1970’s, the Chilean Government took the mines over (nationalized) them. Our Montana mine was not profitable. Anaconda, at that time purchased their copper from other suppliers, for use in manufacturing at their several basic metals production plants,

Eventually, Anaconda went out of business after a takeover by ARCO as the manufacturing side of Anaconda was still somewhat viable.

It’s near impossible to get a NEW mining permit in the U.S. due to environmental permitting rules, and mines in other countries are doing well and selling worldwide.

Look at Freeport-MacMoRan (FCX) if you are interested in investing in copper production. Buy remember, commodities require careful analysis if you are to invest.

Also, check Southern Copper Corp (SCCO). Mines in Mex. and Peru.

If Amazon and Walmart get their way and last mile delivery goes all electric, this downward trend will steepen and gain steam.

But again, it remains to be seen how much reliable lithium production can be brought online. My suspicious mind expects most cities to put overhead wires in and electrify the entire bus fleet, a la Seattle. You can get all the urban poors (i.e.: bottom 80%) onto public transit — an idea that makes the typical planning bureaucrat glow like ET phoning home.

“…a la Seattle…..get all the urban poors onto public transit…” Besides the smelly people, snoozing homeless, assorted lowlifes on Seattle light rail and buses, normie riders have a new problem to worry about….second hand fentanyl. Seattle bus drivers claim they are experiencing dizziness, drowsiness, and other symptoms indicating fentanyl exposure.

Let’s face it, the problem is other people (not you or me, of course).

They have ordered something like 4,500 vans….they would need tens of thousands of delivery vans in the USA alone….probably even more….

Wonder what happens when they self destruct = burst into flames destroying cargo could be a problem

That is another lie you’re spreading here. Amazon alone has ordered 100,000 vans from Rivian alone, plus a bunch of vans from others. They all ordered a bunch of vans.

You’ve hit your quota of EV lies. The rest will be deleted.

RTGDFA https://wolfstreet.com/2022/07/12/why-delivery-giants-walmart-amazon-fedex-ups-even-deal-with-collapsing-ev-startups-ev-spac-canoo-is-the-latest-deal/

Assuming these big companies are able to plan well enough to make their EV deliveries work, that could put a big dent in overall demand for fuel. I suppose we’ll know how well it works in time, but it seems like Amazon is doing this backwards. Ordering the vehicles first, then they’ll worry about infrastructure later. It resembles the backwards approach taken by politicians in their push toward full EV adoption.

A huge EV van order is fine… I won’t venture into my view of their viability, but it would be fascinating to know exactly how Amazon is budgeting and planning for them. Have they ordered the vans without first performing comprehensive surveys of electrical capacity at their individual facilities? Do they have plans submitted and permits pending with the municipalities in which they plan to operate the EVs? Who is supplying the chargers? Have plans been produced or evaluated by an impartial third party, or are they just trusting a rosy picture painted by Rivian’s marketing folks?

I know of a large national office supplier who tried to do this on a much smaller scale. Even with fixed routes on a daily routine to specific stores, the program didn’t work out. Their EV delivery trucks present challenges, but they weren’t the root cause. It was their executive’s optimism and failure to plan for the myriad non-vehicle factors that must be addressed first in order for the vehicles to work.

They call you Not Sure, but it’s not stopping you from opining anyway.

>Ordering the vehicles first, then they’ll worry about infrastructure later.

Wolf addressed this in the article linked. It’s only a few days ago and I’m sure you commented on it.

> Have they ordered the vans without first performing comprehensive surveys of electrical capacity at their individual facilities?

You do realize that Amazon is one of the largest companies in the world and have been doing exactly this for 15 years at all of their various data centers? You do realize that a data center is a couple orders of magnitude more complex than a bunch of vehicle chargers? You’re just making an argument against Amazon management. That sounds like an argument to short AMZN, but not much else.

Higher gas prices, demand destruction & reduced consumption, and reduced VMT: all good things. This country is so pathetically dependent on the auto and likewise so far behind any other developed country in our transportation systems. We all need a good kick in the pants to start demanding our elected officials deliver some modern, high quality alternatives.

You have any examples when your elected officials delivered such high quality alternatives?

Maybe on the next deficit binge, the first 30T got away. After spending that kind of dough you would think every American would have a chauffeur.

Who needs to actually physically go anywhere when we’ve got social media? Look toward youth to lead the way, old dudes.

The virtual world is the real world.

Yes, the new frontier is not outer space but cyber space. Trouble is virtual worlds function on virtual money such as bitcoin. That’s something most old dudes just cannot accept.

Capital investment in virtual world isn’t working out so well when it comes to providing real needs such as food and housing at a reasonable cost.

This is why the next frontier for computing will be small compartments bursting open tents and food trays for online users, with supplies stored in miniaturized ovens and fridges next to the internal motherboard.

Virtual is an incredible opportunity for fraud and rug-pulls. And the ephemeral quality means your stream of income ceases in a finger snap. Try eating that NFT when your “friends” have wandered, rather sprinted, oh yeah clicked, elsewhere.

But it is a good placeholder of doing and wasting nothing, instead of the stupid nihilistically infantile-narcissistic pursuits of most humans, especially Americans.

Gasoline at right around $10 per gallon would be a desirable price point and would bring the US in line with most of Europe and reaching that level should be and likely is a key goal of US policy.

Unfortunately, I think that is very unlikely.

Why would good policy be to lower someone’s standard of living?

To protect the Earth by funding mass transit programs and alternative sustainable energy use.

Mass transit is for the little people. The planners take the 600 mph oil burners.

Yes, so says everyone else that isn’t being inconvenienced or priced out.

You’ve given up using fossil fuels, right?

I didn’t think so. “Shared sacrifice” is for suckers.

It is the tragedy of he commons: the psychopaths will take take take, until the resource is depleted and the place a wreck. The good people (or passive or stupid, etc.) will be left in the dust (before that becomes everything everywhere). Yet there are people here touting the psychopath ego-mania line. Sheer nihilism dressed up as grandiose selfishness.

First off, protecting the Earth is a fraudulent concept. This planet will be around long after mankind is extinct. Anyone preaching “Save the Earth” is actually saying “Save my Lifestyle”. None of those prophets are giving up their standard of living.

Second, it is the height of hypocrisy for any individual in a first world nation to preach to the less developed about how they should tailor their consumption and growth. The world economy has grown tremendously over the past 100 years and the actual percentage of people currently living in what would have been considered poverty at that back then is miniscule. At the same time, while steadily increasing consumption worldwide, we have also continued to increase population growth, mainly in those less developed areas.

Lesser developed economies must use the cheapest means possible to increase their standard of living, which means they will rely on older technology for most of their growth and consumption. You cannot expect nations like Bangladesh, for example, to invest in EV’s when they can use ICE for a much lower cost. And since those poorer nations are where the population’s growing that’s the expanded need that will have to be filled. ICE will be a dominant technology for another 40+ years; until something that can provide the same advantages is more available at a lower cost.

We are never, as a species, going to be able to use technology to conserve resources until we regress the population, and politically, culturally, and biologically that’s hard to do.

Ya take your mass transit to your next campsite or your child’s soccer game. Let’s see how convinient that is. Gotta run to the market, when’s the next bus. Impractical and a waste of money

Re Bigbilljr. Around where I live people do take mass transit to the soccer games and even campsites. In both cases it may involve some walking, but to campsites the distance is by choise.

Urban planning make mass transit the most convinient transport to a soccer game in many cases.

Next bus, tram, tube or train will often arrive a few minutes after you get to the plattform. In London I have seen the underground trains spaced with two minutes intervall at peak hours.

I thought that WAS the Feds policy for most people.

The Fed was trying to keep the whole circus going, for the most people. Seriously. But they took the path that was first easy and cheap, later high-cost. We are all paying now for the freebies, which was inevitable. But they were not going to have the whole thing go under on their watch. So they stretched out the pain into the future. But the future finally arrived, here.

Nudging around costs and benefits is what finance does. It is what government does.

Try a world that is truly fair and competitive. Most people will flee in terror from that. Blaming and complaining about the government is a super low-cost low-risk alternative.

Last time i filled petrol on my car I did pay about the equivalent of US 10 dollar an US gallon. Quite a bit up from a year ago, but it is not what will lower my living standard.

$10 per gallon in the US? With the US’s huge geographical landmass as opposed to European countries? That’s really a no-go zone there. Europeans can tolerate higher gas prices since their travel patterns are much more tightly wound in smaller spaces than the spread out, wide open US of A.

If gas prices keep going up without any taxes, will we start asking questions as to whether we collectively can afford the middle class lifestyle here in America?

Many young people in SoCal and the Bay Area can’t afford the middle-class lifestyle as it is. Sad.

Well, the USA would then transform to look more like some plases in Europe where space is ample. The people live in areas as dense populated as in the overall dense populated areas. With a lot of almost unocupied space between.

Imagine US towns as dense as European towns without any exurbs and little suburbs outside city limits.

Are you ready for food,clothes,lumber and everything else to double or triple in price .We created a world that manufactures and delivers all goods on petroleum products

I think the price of Gasoline has something to do with the war in Ukraine as do inflation, am I right?

Indirectly and only partially. The spike got serious in mid-2021, long before the war in Ukraine. You can see that on the chart.

The US is a big exporter of gasoline. So the global rise in gasoline prices boosted US exports, which helped boost prices in the US. Same with natural gas. US exports have a big impact on prices here.

I swear that Wolf is reading my mind. If not that then I may have to have my house swept for bugs.

I literally looked up the EIA statistics about gasoline sales this morning before going to work. I heard a spat on some news show where a Biden representative was taking credit for a 40 cent drop in gas prices and the Republican retort was that it was because of the conservation efforts of American drivers rather than the efforts of the Administration.

And Wolf is right about consumers making “behavioral changes” when it comes to using gasoline. I am still driving a 20-year-old SUV which just guzzles gas. Until this latest crisis I hadn’t realized how many fuel economy lessons I had gotten OUT of the habit of using. Combining trips… turning off the ignition when a train goes by… making sure the air in the tires is the proper amount… going into the restaurant rather than sit in line with my car running for the take-out window. Without even noticing it I had started doing these things again this year.

Wife and I got a hybrid in January of 2020. Thank you Toyota. Last summer work made her work from home permanently. Goes in one day every 2 weeks. On a good month the tank may take 7 or 8 gallons . As for the layoffs. What you are not seeing is the tens of thousands losing jobs every week as these small restaurants. Small business close due to retirement. High cost of food and inflation

BA-5 is spreading. BA-5 imprison people for ten days. BA-5 reduce consumption. WTIC might drop to the 70-80’s.

Remarkable is the disparity in local prices. Clubs like Costco might have 4.60 price…..and you drive down the road and see Shell at 5.35 Such differences are historic. (usually just 10 or 15 cent differences) This can be attributed to some variations in those stations that “forward priced” their supply purchasing well….or not so well, as the case may be. But, it could bolster the notion of many stations “gouging”.

The other side of consumption is supply. “Event” might constrict supply. WTIC might rise in a sling shot to a new all time high.

Putin. Saudis. Europe winter. Plenty of potential “events” out there.

But I like it better than the rosy mental scenarios and anchors of manic freeway-crazed entertainment-addled Yanks.

I bet in barbell shapes, at the edges, that still anticipate disruptions, up or down, mirroring what I interpret to be much of ME’s remarks here.

I translate ME’s missives into Swahili and then back into Finnish before attempting to decipher them my decoder ring.

I’m seeing a couple of anecdotes that might explain some short-term trends: (1) When prices were rising, Costco gas lines were long as people were topping off their tanks once they got down to 3/4ths, as they knew they’d pay more in the future. Now that prices are falling, people are running their tanks down to empty, hoping that the next gallon they need to buy will be much cheaper. Supplied gasoline is staying in corporate storage, not individual vehicles. (2) A “general buyers strike” targeting the “as long as it takes” mentality of the current administration is resulting in sales across the board to decline. (ref: credit card sales & lack of gas demand).

Copper is down. Demand destruct sent Southern Copper (SCCO) under Oct 2007 high and Sept 2021 low. It might reach the low 30’s area, a higher low slightly above Mar 23 2020 low.

1) In 2008 when commodities plunged and DXY reached nadir, EUR/USD high freq transmitted pile of debt to China to build RE, infra, factories, military.. 2) DXY is 50% higher. China is struggling with high debt and falling RE prices in dollar terms. 3) China RE is caving from within, but expanding overseas, enslaving oil and commodities producing nations or strategically important. 4) China is buying farmland next to sensitive strategically areas in US.

> China is buying farmland next to sensitive strategically areas in US.

USA has law in place to block that. Where are the watchdogs? But that can be patched later. Lots of walls of various types are going up. Cyber, strategic assets, supply chains, etc.

USA has all kinds of laws that arent being enforced

What do you think the Chinese will grow on these farms?

China is buying farmland next to sensitive strategic areas in US…..

Who now says he will die poor.

You will drive nowhere and be happy.

I’ll probably downsize to one of those Maverick hybrid pickups from the Expedition l’ve been driving since 2006. It’s paid for and we also have a Honda, so on long trips it doesn’t kill us, but still. I’m sure at some point the Expedition will give it up. I do love that truck, tho.

I’ve had my eye on the Maverick, but here it’s $10k over MSRP, if even available.

“And people are buying EVs in larger numbers.”

A hopeful trend, even if it’s a bit late.

NYT reports that companies that have spent years developing longer-range, faster-charging electric vehicle battery cells are starting to build manufacturing facilities, a major step in bringing the batteries to market. Good for ev. Bad for petrol.

OTOH, Utility Dive reports that battery prices for electric vehicles and storage are expected to rise this year for the first time since 2010.

You knew there would be headwinds in transitioning away from fossil fuels, but there’s cause to be cautiously optimistic. Still, I wouldn’t hazard a guess as to how it might play out. Always in motion the future is.

It’s not surprising that fuel consumption has been stagnant since 2007 since overall US fleet fuel efficiency decreased between the late 1980s and mid-2000s, then started rising in the late 2000s decade.

2007 finished country living for good. Most small independent retailers went out of business then and so did the route delivery trucks who couldn’t pay the high gas prices. Schools closed, most people reluctantly moved to the city. That infrastructure is all gone. And with it, even more decent jobs evaporated.

Not entirely. Rural living is still a good retirement gig because housing is so cheap and pace of life so slow. Pretty easy to get property taxes below $1000 in rural areas where I live, even in a decent home.

Just curious Where do you live I am looking for a cheap retirement place to settle down Not too expensive Big city is not for me

Using diesel to produce corn to supplement gasoline… insanity Government needs to get out of the way. Farmers are now addicted to high-price corn. Congress is afraid of farming lobbies. Can’t – break – the – cycle –

Corn is a food. Diesel is a fuel for working engines. Gasoline is a fuel for passenger vehicles.

Straight gasoline is more efficient and better for ICE than when cut with ethanol. Refineries have more capacity when they aren’t required to blend and price to consumer is lower.

Ethanol pulls water moisture from the atmosphere inside the gas tank and holds it in suspension, causing corrosive byproducts during combustion, or so I’ve read. Better to keep your tank topped off in a humid, hurricane-prone area. It’s known to eat the small hoses in lawn equipment. I keep forty gallons of 90octane no-eth gasoline treated with stabil for generators and bugging out in a fuel dump away from the house. It’s Good for eighteen months conservatively. I may convert one generator to LP. Gotta be ready, the Gulf is at the end of the block. When the cheapest gas was 4.28 at the Wal, lines around the store. It’s under $4 now, empty pumps. They stole gas tanker trucks in the seventies, haven’t heard of that yet. There’s lots of places where ICE vehicles and equipment will make better sense for the foreseeable future. And many more where they won’t. Utility and cost always talk amongst themselves.

The Farm lobby is very strong, ethanol is here to stay.

1) JP will raise interest rates to fight inflation. 2) The German 3M is up to minus (-)0.2 and the 6M is zero. 3) JP might fight inflation, but US no longer control oil prices. MBS does. 4) O/N, short in duration, planned in advance limited blackouts, are good enough for ev drivers to go work, to school, to buy food, to create more demand destruction. 5) If only oil and commodities glut cure inflation, not mortgages between 5%-7%, not even recession, we might have a lost decade with both inflation and recession… 6) US debt compounding deflation will clear the roads for the zoomers in the 2030’s – 2050’s.

So now stocks are up 1.5% supposedly on the basis that “bank earnings” and “retail sales” are good. But that’s just the opposite. Strong retail sales gives the Fed even more ammunition to continue its rate hiking and QT, which of course, is very bad for risk assets.

The CNBC shill narratives aren’t even consistent with each other.

Just like following the real estate bust.

Good news is bad and bad news is good. Grass is blue and the sky is green!

Anybody telling you the reason a market acted like it did on any particular day is just making stuff up. It’s not like the trade button has a survey afterwards asking “why did you buy/sell today?”

Get that noise out of your head already.

UPS has been trying out a small fleet of electric assist delivery trikes. One of them is used daily and parked next the UPS depot I go to. It is all enclosed and has a little roof and windshield and reminds me of those 3 wheeled vehicles you see in India or Thailand. I think 5 years from now streets in the US will look at lot more like Mumbai and Less like the Techn-Yarns Elon is spinning.

Good comments. Sadly there are a lot more reasons why the US will be more like Mumbai 😬😬

The US is destined to resemble the old Soviet Union before disintegrating into a Mad Max dystopia, and he paid nothing for petrol. It won’t be long now.

Once upon a time sixty years ago the USPS used Cushman Mailsters, 18hp air-cooled three-wheelers. Seated, enclosed cab with windshield and cargo box. Didn’t go fast. The government would auction off old ones for a few hundred dollars.

Not totally related, but I’m reading that BMW is going to consumers in some markets a monthly fee to use the heated seats.

I can’t think of anything more stupid and wasteful than spending money and natural resources putting hardware into cars that you’re then going to disable by software.

I hate the modern “economy” so much I want it to crash and burn.

I just want to sell software control delete kits…

On the other hand, my “old” 2016 M4 is set up, by me, to have the engine map on ‘Economy’ & the steering system on ‘Sport’ when I start it up.

As soon as I make my way down the alley and onto the street, a quick push on the button by the gear-shift lever (manual six-speed) and the engine map is on ‘Sport.” Having the ability to choose between the three engine/throttle settings at the push of a button, is something I like very much.

With ‘Sport,’ the engine responds more quickly in revs and power delivery than in ‘Economy,’ but when downshifting, the computer also matches engine revs to make things seamless (as it does in Economy) — without blipping the gas pedal — which I can do, and occasionally do when in ‘Sport Plus’ engine mode.

The software on my 2019 V4 1100 motorbike is a game changer. Engine mapping, wheelie control, traction control and ABS braking control. My bike is set just the way I want it, and it is so predictable in how it responds when I ride it. My 2002 Kawasaki ZRX 1200 is a great machine, and parked beside my Tuono, but I have no desire to ride it anymore because I am so in love with the newer one.

Totally agree, the SAAS (software as a service) on the new BMWs is a terrible concept.

Zero Motorcycles, the EV motorbike company out of California that is also in partnership with Minnesota’s Polaris on electric vehicle development & projects, has all kinds of “Software Downloads” to allow owners, who’ve already paid a shi#load for their bike, get features that are already built in to be usable. F that, eh?

My gas station in St. Paul, MN, now has 91 octane non-ethanol @ $5.10 per. It was $5.50 per a couple weeks ago.

BMW wants to charge by the ride. You’ve heard of Software as a Service? This is Motoring as a Service. No right to repair either.

Porsche charges thousands to remove standard equipment to make a stripped down version. As seen on Top Gear.

In time you’ll be charged a fee to breathe the atmosphere. They’ll buy out The Police for their theme song. Every breath you take, they’ll be watching you.

Yes. I hate software as a service. I don’t want to pay a monthly fee. I want to buy software I want, and use it for as long as I want until I want a new version. And not forced to upgrade, but choose to.

Saw a guy yesterday put $150 of gas in his F150. That has to hurt.

The Russian Duma is called for an emergency session, possibly to preempt MBS. We might get a positive surprise next week.

It’s that long term demand destruction that has me scratching my head at OPEC (really Saudi Arabia since they’re the only ones with real capacity) keeping prices up this long.

It might be doing a solid for a fellow autocratic nation, but they lost a lot of money flooding the market to take share from more expensive production like shale and oil sands.

Price is a function of supply and demand. They went after the supply side hard, which makes sense for any price-fixing cartel. But now they’re just letting EV grow instead of keeping it down too (with cheap gasoline). EVs vs. gas automobiles have different pros and cons, but one of the biggest limitations with EVs is they are still more of a DIY/get lucky with refueling. The more share EVs get, with $5-$6 gas as its selling feature, the less people are scared off from giving it a try.

After all, batteries power American’s true love, their smartphone. Many have little loyalty for gas powered tech.

Wolf, What do you think will happen with infrastructure funding as EVs become more common? Most surface transportation infrastructure, including public transit, is built from gas taxes. As overall fuel efficiency goes up, and especially as EVs proliferate, the amount of tax collected per mile driven goes down.

Already federal gas taxes aren’t enough to cover spending, and it will get worse. Eventually gas taxes will have to go up higher and higher since it will be borne by a smaller percentage of the road-using public.

I think some states like Illinois have a special annual permit that EVs have to buy, to compensate for the gas taxes they don’t pay. Perhaps we’ll see more extensive tolling on roads too (transponders make it much easier than having to staff toll booths). But somehow, we’re going to have to figure out a way to pay for infrastructure that’s not tied to gas taxes, and do it soon, before EVs get any more popular.

(NB: I fully support EVs. We have to move beyond oil. Nothing will make me happier than seeing Saudi Arabia and its corrupt rulers go bankrupt. But doing so will require a rethink on how we fund infrastructure).

Yes….there will need to be a method to replace the gas tax that pays for the roads.

I am not sure what the final solution will be but either

– A EV Tax added to you license tag renewal – Property tax is higher for an EV – The best solution may be to charge per mile driven. Since all EVs probably have computers and some type of wireless technology like Bluetooth, Wifi, Cellular. You just download your data and pay online. Or since most EVs will have annual paid subscription services, have a pass through from the manufacturer to the state. I just read BMW is going to charge a subscription just to use things like heated seats, etc. I am guessing they will just install heated seats in every car and hope in the winter time people will want the feature and buy the subscription. It may lure people who would not add the heated seat package when they buy the care but they may change their mind later.

Homebuilder related stocks broke out a 6 month trend.

Now it looks like banks are bouncing.

Lots of people are thinking 2.5% to 3% is the max rate the Feds will implement?

Russell. An unusual number of people I know (under 60) have mentioned having blood clot problems. People in their 30’s & 40’s. But they have never mentioned having Covid. Now I wonder if they had a mild case, or if they had one without symptoms?

However, or where ever, it originated, it sounds more and more like the perfect bioweapon. Sneaky symptoms, with long term debilitating consequences.

The Dow weekly : since June 27 three buying tails, This week is a hammer at the bottom with the longest tail. June 13 landed on Nov 2/9 2020 open gap. The dollar index @107.87. The weekly, if today close < last week high @107.61, last week, a setup bar. This week, a trigger. The dollar might weaken and EUR/USD might popup.

The Dow reached May 12 low resistance line.

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But inflation is eating everyone’s lunch.

The USD had a heck of a ride, which kept inflation from spiking even further. But it may not last much longer.

Blame whatever. Just don’t blame money-printing and interest-rate repression.

Oh dearie, the Fed is going to meet in late July, and it’s going to talk about services inflation.

Scaring legacy automakers into finally producing electric cargo vans is like pulling teeth.

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