Publications: Notes at the Margin

Recovery in Oil Use Lags the Economy (June 1, 2021)


The oil industry suffered several dramatic losses during the last week of May 2021. The victory of environmental plaintiffs in a Dutch lawsuit over Shell and Engine No. 1’s success in replacing two directors of ExxonMobil were the ones noted everywhere. Less conspicuously, data on US personal consumption spending released Friday, May 28, warn that US gasoline use has failed to increase at the rate many forecasters expected. The slower than anticipated recovery confirms the information conveyed by excess returns to storage for gasoline: markets are in balance even with lower production. Put simply, circumstances in US gasoline markets may have changed permanently.


In the second section of the report, we discuss how pressure from the IEA and other national and international organizations threaten to discourage or force cuts in oil and gas exploration investments. The reductions could create a “chiplike” situation where global oil demand in the late 2020s or early 2030s cannot be met, just as chip demand today cannot be satisfied.


To receive the full report along with futures issues of Notes at the Margin, please Contact Us or send us aInformation Request for subscription information.