"Goldman's Damien Courvalin says this sharp of a decline has occurred in just four periods since 1960, and each time personal consumption expenditures fell alongside. For gasoline demand to fall 6%, it would require a recession." http://seekingalpha.com/news/3241527-goldman-mulls-collapse-gasoline-demand
I love GS research, but when WTI was $140, they had a price target of $200, then we went to below $30. oops.
There was a drawdown today in RBOB inventories. Expect prices at the pump to increase in the next month or so as refiner's clear out their winter blend and shut down for the summer blend changeover/plant maintenance. But there is decreased demand. Some blame it on increased fuel efficiency. I think people are just driving less. Not so much about economical factors, more so about about a change in the cultural mindset. I should work for GS. Naahh...
That's the difference between Technical and Fundamental Analysis. TA deals with current situation while FA tries to justify logics based on the historical precedents. Here's my forecast: Near term oil prices might drop to mid to early 40s, but target of in and around $80 is intact in coming few quarters.
There is smth weird going on in crude and products... The cumulative build in the past few weeks has been YUGE. And yet, there's no visible dent. Moreover, spec long positioning is the highest I can recall and keeps going. All very strange.
People are driving more. We can blame global warming for the decrease in gasoline demand. We know that as the temperature rises, liquids expand. As explained here, : Science Clarified: "The behavior of gasoline pumped on a hot day provides an example of liquid thermal expansion in response to an increase in temperature. When it comes from its underground tank at the gas station, the gasoline is relatively cool, but it will warm when sitting in the tank of an already warm car. If the car's tank is filled and the vehicle left to sit in the sun—in other words, if the car is not driven after the tank is filled—the gasoline might very well expand in volume faster than the fuel tank, overflowing onto the pavement." See that, warmer temperatures, aka global warming, is causing more gasoline to magically appear in the tank and thus cause people to purchase less and less of it.
Ouch. I was a broker dealer with my own trading business as a floor market maker. I only used Redi to layoff risk and pairs trade.