Gasoline demand was one of the culprits in yesterday’s crude oil demise as demand slipped, causing problems for the Fed as Fed Chair Janet Yellen says all the pieces are in place for inflation. Yet, the weakness in gasoline demand and economic data may suggest that we may be seeing some underlying softness in the economy. Now you might not think that if you look at the jobs reports and the help wanted ads but in general, the gasoline demand numbers don’t jive with a booming economy.
A surprise increase in U.S. oil supply as reported by the American Petroleum Institute as well as a report on increased shale oil production from the International Energy Agency has the oil market acting loopy. The IEA predicted that oil supply would outstrip demand next year, with output increases from U.S. shale producers.
In a world full of geo-political risk, can we take some comfort that at least one dangerous hotspot may cool down? Former basketball star Dennis Rodman is on his way to North Korea to open a dialogue with his buddy North Korean leader Kim Jong-Un. Maybe Dennis can explain to him that nuclear war may not be in his best interest. Crude oil traders can now rest easy. We’re all so relieved.