US Gasoline Prices Fall, Demand On The Rise

$UGA, $USO

After almost 10 yrs gasoline consumption in the US was in the doldrums, now with prices down demand is back strongly.

Gasoline consumption peaked in Summer 2007 at almost 9.7-M BPD. But then soaring fuel prices and the Great Recession took their toll and sent demand as low as 9.2-M BPD in Summer 2009.

Demand began growing again in Y’s 2013 and 2014 when prices stabilized and the economy started to recover. In Y 2015, demand appears to be accelerating as the expansion matures and fuel prices remain 25% lower than a year ago.

Traffic volumes on US highways are running at least 3% higher than year-ago levels according to data from state transportation agencies.

At the same time, Americans are driving larger vehicles. Demand for large SUV’ (sport utility vehicles) and pick-up trucks with relatively higher fuel consumption per mile is growing fast, encouraged by lower fuel bills.

The share of light-duty vehicles classified as trucks rather than cars was 54% in June 2015, up from 50.6% n June 2014, according to the data.

Fuel consumption has been the big story in 1-H of Y 2015 as the strongest demand in almost 10 yrs has helped keep refining margins strong and support Crude Oil prices despite rising output from OPEC.

US refineries are running flat out to meet motor fuel demand. Refineries have been processing a near-record 16.5-M BPD of Crude Oil in recent weeks, that is 1-M BPD higher than the seasonal average.

HeffX-LTN Analysis for UGA:	Overall	Short	Intermediate	Long
HeffX-LTN Analysis for UGA:	Neutral (0.05)	Bearish (-0.34)	Neutral (0.21)	Bullish (0.28)