Yesterday, in comments, DataMunger suggested using the EIA's weekly product supplied series, instead of the refinery production numbers. This morning, I tackled that, using the same seasonal adjustment approach (easier the second time, as one can cut and paste into the same spreadsheet). Firstly, here's the raw data:
Interestingly, it doesn't look strongly seasonal, and indeed that is confirmed by computing the seasonal adjustment factors (along with yesterday's series):
It's not really clear there is too much seasonal adjustment here, versus just noise. I find this a little puzzling - the product supplied is not seasonal, but, at least the subset of refinery products I picked on is? Anyone have any insight into that? The most obvious back and forth in the situation would be summer gasoline demand versus winter heating oil demand, but both of those are included in my "refinery production" sum.
Anyway, putting that series, with the same kind of 27 week centered moving average, on the same chart as the other, you can see it's a similar story:
The "product supplied" numbers, present a very slightly more optimistic picture - the series stabilized a couple of months earlier, and now looks to be in a weakish (if bumpy) recovery, though looking at the earlier behavior of the series, it's probably not statistically different from "flat".
I have been in doubt of the existence of any economic recovery until a rise in oil consumption appears. It certainly does feel strange to ignore all the economic experts; however they do want me to believe we can have infinite economic growth on a finite planet. Thank you for the welcome Stuart. Upon reading second shock I realized it is best to read at least the first page of a blog before firing off comments. It would appear that soon the second shock theory will be put to the test. Oh the times we live in. Thanks again Stuart for your work on this most important topic.
ReplyDeleteMark - it seems like the general pattern in the last couple of recessions (1991 and 2001) is that employment was very slow to recover compared to earlier recessions - GDP starts go grow again at the end of the recession, but employment recovers very slowly. Paul Krugman has highlighted this often. My guess is - to be confirmed with an investigation of the data soon - is that oil demand goes more like employment than it does like GDP. So we will see a gradual recovery in oil demand.
ReplyDeleteLooking at that graph again - this was one heck of a recession to knock 10% off US oil usage!
Morgan Downey charted US product supplied in its various sectors in a TOD article: The Oil Drum | OPEC Meets as Oil Demand Turns the Corner. The seasonality shows up more strongly with gasoline; he didn't chart propane use which is the most seasonal of all. He only covered 9 years on the X axis as well, using all 19 years of EIA data blurs things a great deal. Here's a chart of mine showing YOY demand for minor products 2008/2009.
ReplyDeleteKLR - thanks for the link - that's a nice piece. I've read a number of pieces by Morgan over at his blog, and he seem to really have his head screwed on straight. I guess the news since that time is it now appears that US oil demand *has* stabilized in the fall, which wasn't clear looking at monthly data back in September.
ReplyDeleteA year and a half ago as this demand picture was emerging, I was fairly sanguine thing that a 9% drop might cost about 3% in GDP as it has in the past.
ReplyDeleteOh what an innocent lamb I was. Sure real GDP did drop 3+ % but the overall hurt has been ... hmmmmmm.(e.g on top the high unemploymnet, consider that at the end of July 08, the national debt was 9 and a half trillion. Now it's north of 12.)
Meanwhile pce as a percentage of gdp continues to grow through it all. Volcker notices but unless there is some actual action, one can't help but suspect growing paralysis or nihilism.