Three snapshots for Monday
The NAHB U.S. homebuilder sentiment index held at 28, below economists’ expectations for 30.
Apple will initiate a regular quarterly dividend of $2.65 a share in July and will buy back up to $10 billion of its stock starting in fiscal 2013.
Energy leads the way for commodities this year, but with a big divergence between the components – gasoline sitting at the top while natural gas sits near the bottom.
The missing barrels of oil
Where are the missing barrels of oil, asks Barclays Capital.
Oil inventories in the United States rose sharply last week, with demand for oil products such as gasoline at the lowest in 15 years and crude stockpiles at the highest since last September. Americans, pinched in the wallet, are clearly cutting back on fuel use.
But worldwide, the inventories picture is different – Barclays calculates in fact that oil stocks are around 50 million barrels below the seasonal average. And sustainable spare capacity in the market is less than 2 million barrels per day. What that means is that the world has “extremely limited buffers to absorb any one of the series of potential geopolitical mishaps.” (Barclays writes)
A big difference from the picture at the start of 2012. With the global economy weak, analysts predicted OPEC would need to pump 29.7 million barrels per day in the first quarter, more than a million barrels below what the group was actually pumping. Logic dictates inventories would have started to build.
But since then conflict in Syria, Sudan and Yemen has removed a combined 1.2 million barrels per day of non-OPEC crude, Barclays says. There have been some problems with North Sea output.
Most crucially, Iran, OPEC’s No.2 producer is under sanctions for its nuclear programme. The country has already seen production fall 5 percent from February 2010 levels. The supply situation will get worse, as countries trying to cut back on purchases from Iran compete for imports from elsewhere, notably Africa. But there is little spare capacity elsewhere — Goldman Sachs notes that output in Saudi Arabia, OPEC’s biggest producer, is already at 30-year highs.
Now for the demand side. For one, markets are no longer pricing in a complete economic meltdown in Europe or the United States. But far more importantly, Asian demand has been far more robust than anyone expected. That’s where the missing barrels of oil appear to have gone.
Cost of expensive gasoline measured in SUV sales drop
Are high gas prices killing Americans’ love affair with gas-guzzling SUVs? Looks that way.
In April, SUVs and light trucks took their smallest share of total U.S. vehicle sales in nearly nine years, and dealers sold more new cars than trucks for the second month running — the first time that’s happened since 2001. While many factors have teamed up to torpedo sales of high-ticket vehicles like SUVs — tighter credit, a tough job market, slumping real estate values and a generally soft economy — the fact that pump prices have soared to a record aren’t helping, as the chart shows.
This trend might not easily reverse in May. Gas prices are up an average of 3 percent in the first two weeks of the month, with the latest weekly average pump price setting a fresh record of $3.72 a gallon, according to the Energy Department’s Energy Information Administration.
Not a surprising news. Considering the condition of the nation’s economy, many people are shifting towards smaller cars and others are minimizing on the use of vehicles. I hope that there will fuel-efficient and reliable SUvs that will be massproduced.
The magic of seasonal adjustments: You’re paying less for gas
Been paying more at the pump lately? Not to worry. It’s just a figment of your imagination, new government data shows.
The U.S. Department of Labor’s Bureau of Labor Statistics tells us that gasoline prices fell last month by 2 percent. This was the very same month when crude oil prices surged 11.7 percent and there was NO pass through at the pump? Hmmmm.
Meanwhile, another branch of the very same U.S. government, the Department of Energy’s Energy Information Administration, contends average retail gas prices actually shot up 9.5 percent in April from March. Whoa!
Why the discrepancy?
It’s the magic of so-called “seasonal adjustments” — a practice employed by economists and other statisticians to smoothe out volatile month-to-month changes and give a supposedly clearer picture of the underlying trend within the numbers.
A look at the non-seasonally adjusted data from the BLS is closer to reflecting reality: It shows gas prices rose 5.6 percent last month.
Finally people are writing about what everybody knew a long time ago. But it shows how ridiculas US stats actually are – have you noticed at the way everything that points to higher inflation/ unemployment or lower productivity is smoothed out? Luckily my wages/salary is not set by the goverment’s inflation figures. By the way – not all economists smooth out the numbers. http://www.onemanstanding.com
