Saturday, July 21, 2018

Update on gas and oil prices plus a double driving update for July 2018

Pearl rolled over 41,000 miles on July 17th and Snow Bear passed 3,000 miles yesterday, July 20th, so it's time for an update on oil and gas prices plus a double driving update.*

I left off with crude oil prices over $70 per barrel back in May.  Ali Velshi on MSNBC updated his viewers a month later with President Donald Trump Demanding Cut In Oil Prices To Lower Gas Prices.

Prices at the pump are higher than they were last summer and President Trump is demanding oil prices be cut to bring them down. Ali Velshi breaks down how this could actually cost Americans a lot of jobs.
Crude oil, particularly West Texas Intermediate (WTI), fell below $70 after the May update, but were starting to rise again in late June, when Velshi reported on the story.  They continued to rise into early July, when CBS This Morning asked What's behind the spike in gas prices?

Gas prices this Fourth of July are expected to be the highest in four years because of the rising cost of oil. One reason for the increase is a smaller-than-expected production boost by OPEC, the group of oil producing nations. Patrick DeHaan, head of petroleum analysis at GasBuddy, joins "CBS This Morning" to discuss what's behind the price increase.
Donald Trump jawboning the Saudis didn't have quite the effect he hoped, at least in the short term, as WTI soared above its highs in May.  That continued the next week, as seen when Fox Business examined the economic impact of rising gas prices.

OPIS chief oil analyst Tom Kloza on the outlook for oil prices

Crude oil prices have since declined, but remain above $70 per barrel, as Reuters reported yesterday.
The expiring U.S. West Texas Intermediate (WTI) crude for August delivery settled up $1.00 at $70.46 a barrel, while the more liquid September contract rose 2 cents to $68.26 a barrel. U.S. crude ended the week down nearly 1 percent.

Brent crude settled up 49 cents at $73.07 a barrel. Brent fell 3.1 percent in the week.
The decline in oil prices, which I usually see as a positive, was not the result of good news, as the Reuters article noted.
Lower oil demand in the United States and China caused by an economic slowdown due to the trade spat between the two countries would likely weigh heavily on markets, some analysts said.

“The impact on world economic growth of a levy of this magnitude will be severe and will likely have a strong negative impact on markets,” said Olaf van den Heuvel, chief investment officer at Aegon Asset Management.
Once again, Trump is doing things that increase the likelihood of the U.S. entering recession in the next year.†

Speaking of which, an indicator that I've been following since before I started writing this blog has turned negative.  Doug Short, quoting the U.S. Department of Transportation, reported on cumulative miles driven on July 2, 2018.
"Travel on all roads and streets changed by -0.2% (-0.5 billion vehicle miles) for April 2018 as compared with April 2017. Travel for the month is estimated to be 272.4 billion vehicle miles." The 12-month moving average was down 0.02% month-over-month and up 0.8% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) is down 0.09% month-over-month and down 0.2% year-over-year.
On can see the recent decline in total miles driven in the U.S. on the following chart, especially in the inset "A Close Look Since 2007."

Higher gas prices are finally making people drive less.  Fortunately, Amazon is making it easier for people to shop from home, allow retail sales to contine rising.  That alone might keep the economy afloat longer than it would have otherwise.

It could be a lot worse.  WPLG Local 10 in Miami reported last week Flights canceled to Haiti amid protests over gas prices.

U.S. airlines announced Saturday that the companies had halted all flights to Haiti amid violent protests on the island over rising fuel prices.
That was on July 7th.  A week later, the Miami Herald reported Haiti’s government falls one week after unpopular fuel price hike led to riots.  Yikes!  That's something right out of "The End of Suburbia."

Enough of the oil situation.  Follow over the jump for my usual analysis of my family's driving habits.

I begin with Pearl, whose odometer rolled past 40,000 miles on May, 12 2018.  That meant it took 66 days for me to drive her 1,000 miles.  That averages out to 15.15 miles per day, 462.12 miles per standard month, and 5530.3 miles per year.  That's even lower than I expected and also lower than what I actually drove last year.  Pearl passed 34,000 miles on June 2, 2017, which means that it took 408 days to drive 7,000 miles.  That translates to 17.16 miles per day and 6262.3 miles per year.  I am now driving even less than my goal of 6,500 miles per year.

Now for Snow Bear, which passed 2,000 miles on March 25, 2017.  That was 117 days before yesterday, which translates to averages of 8.55 miles per day, 260.68 miles per standard month, and  3119.7 miles per year.  That's a bit more than the 8.13 miles per day and 247.97 miles per standard month my wife and I drove her between November 22, 2017 and March 25, 2018.  That's because there are parts of two trips to Chicago to see our daughter during that time period.  As I write just about every time I record my wife's mileage, family is a priority.

As I also write every time I report on my wife's car's odometer readings, what really matters is not how much my wife and I drive individually, but how much we drive as a household.  Between March 19, 2017 and July 17, it took me 119 days to drive 2,000 miles.  Averaged with the 117 days it took my wife to drive 1,000 miles, the two of us drove 3,000 miles in 118 days, which averages to 25.42 miles per day, 773.31 miles per month, and 9279.7 miles per year.  Those are only slightly more than the the 24.61 miles per day and 750.51 miles per standard month combined between the two cars my wife and I drove from November 2017 and March 2018.

As for the next updates, I expect to write about Pearl in September and Snow Bear in November.  Stay tuned.

*My wife called me from the road to notify me of this milestone.  Thank you, dear!

†I'm not as sure that the U.S. will enter a recession by the end of the year as I was in May, despite higher oil prices, a trade war, and a slight decline in driving.  On the other hand, I'm not ready to formally extend the deadline.  I'll have a better idea at the next driving update.


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