Monday, July 11, 2011

US Oil Consumption

The above graph shows US weekly petroleum products supplied (EIA) along with a nine week centered moving average to try to smooth out the noise a bit.  Data begin in 2000 and go through the week of July 1st 2011.  You can see that the high prices since the beginning of 2011 were causing a contraction in oil consumed (and I assume this was important in the economic slowdown in Q2 of 2011).

Since the end of April, when prices peaked, consumption has started to rise again.  Here's a closer-in graph just showing 2009-2011, along with prices:

Absent other developments*, I'd expect that a continuation of this trend will lead to an improvement in the US economy in the second half, which in turn will lead to higher oil prices again.

*This is a caveat wide enough to drive a truck through when it comes to the oil markets.


woody said...

I do not see any strong inverse correlation between Weekly Product Supplied and WTI Spot Price.

Stuart Staniford said...

woody - I wouldn't expect that in general, since it also has a great deal to do with the strength of the economy. When demand collapses (eg with the recession), both product supplied and prices will fall.

Nick G said...

US consumption has fallen, and production of all liquids has risen. The result: net imports have fallen by 1/3 since their peak just before the recession.

The decline in net imports will reduce the impact of high prices roughly proportionately.

Also striking: US GDP has recovered to where it was in 2007 when oil consumption/imports peaked - that's a large increase in the GDP:oil ratio.

Alexander Ac said...


this is true only if you ignore level of the debt,



Nick G said...


Sure, debt has gone up. Nevertheless, net imports have fallen, which will reduce the impact of high prices on the US economy.

Ceterus Paribus.