Bloomberg Oil Strategist: “Oil Prices Are Down. Nobody Told the Gas Pumps”… Next Time, Maybe Do a Little Research!

Bloomberg Oil Strategist: “Oil Prices Are Down. Nobody Told the Gas Pumps”… Next Time, Maybe Do a Little Research!

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Guest Bloomberg Oil Strategist Correcting by David Middleton

Oil Prices Are Down. Nobody Told the Gas Pumps

Julian Lee
19 August 2018

(Bloomberg Opinion) — Oil’s popularity isn’t what it used to be.

[…]

Although dollar-denominated crude prices are currently around 40 percent below their level just before the 2014 price crash, the same is not true of retail gasoline or diesel prices, not even in the U.S.

American average premium gasoline prices peaked in June 2014 at a little over $4 a gallon before sliding below $2.50 in early 2015 and as low as $2.20 a year later. But since then they have staged a steady recovery, coming within a whisker of $3.50 in the run-up to this summer’s driving season.

[…]

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Julian Lee is an oil strategist for Bloomberg. Previously he worked as a senior analyst at the Centre for Global Energy Studies.

Bloomberg Quint

American average premium gasoline prices peaked in June 2014 at a little over $4 a gallon before sliding below $2.50 in early 2015 and as low as $2.20 a year later. But since then they have staged a steady recovery, coming within a whisker of $3.50 in the run-up to this summer’s driving season.

Hey Bloomberg oil strategist!

The gasoline prices you are citing are for premium unleaded and include taxes.   The vast majority of motorists use regular unleaded.  Crude oil prices don’t include taxes; although you never specify which benchmarks you are referring to.

The US Energy Information Administration reports daily gasoline and crude oil benchmark prices sans taxes.  Anyone with access to the Internet can actually look this up:

Regular unleaded gasoline is currently going for about $1.97 a gallon before State and Federal taxes.   While gasoline prices don’t instantaneously follow the ups and downs of crude oil prices, since 2003 the ratio of gasoline to crude oil prices has been relatively constant, averaging 1.34 with a standard deviation of 0.21.

Gas_WTIGas_WTI

Figure 1. Daily US regular unleaded gasoline and crude oil spot prices in $/bbl 3/11/2003 to 8/13/2018 (US EIA). The black curve is the ratio of gasoline to crude oil prices. The average ratio over the time period was 1.34 with a standard deviation of 0.21.

Furthermore, even if we cherry pick June 2014 as a starting point, we get the same result:

Gas_WTI_2Gas_WTI_2

Figure 2. Same as Figure 1, starting with the first price report of June 2014. Note that the ratio of gasoline to WTI is essentially where it was in June 2014.

Maybe Mr. Lee should be a climate data strategist for NOAA or NASA-GISS.

This Is Funny!

I Googled Mr. Lee’s former employer, Centre for Global Energy Studies, and got this Bloomberg summary:

Company Overview

Centre for Global Energy Studies operates as an energy forecasting company specializing in the analysis of oil markets, and economics and politics of energy markets. It forecasts oil demand, supply and prices, strategic hedging, politics and economics of the main oil producing regions, and OPEC policy in the Middle East, Russia, and the Former Soviet Union. The company also provides tailor-made consultancy and holds energy-related events. It publishes specialist studies, reports, and oil market subscriptions. The company’s subscription reports include global oil insight, oil product price report, monthly oil report, and FSU oil and gas advisory services. It conducts studies relating to world…

Detailed Description
17 Knightsbridge

London, SW1X 7LY

United Kingdom

Founded in 1987

Phone:
xxxxxxxxxxxxxx

Fax:
xxxxxxxxxxxxxx

www.cges.co.uk

So I clicked on their link, and it took me to EMERGENCY, REPAIR AND MAINTENANCE
SERVICE, a London-based home maintenance outfit… Too fracking funny!

It turns out that the Centre for Global Energy Studies was shuttered in 2014.

 

Superforest,Climate Change

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