The US added 2,789 bcf of natural gas to storage in the 2014 injection season. This is significantly higher than the 2,131 bcf injection last year.
Natural gas consumption in the US is very seasonal. Consumption is highest in the winter when heating demands are at their highest.
Weakness in crude prices does not bode well for profits of major oil producing companies like ConocoPhillips, Occidental Petroleum, and EOG Resources.
Crude stocks at Cushing increased by 718,000 barrels to ~23.25 MMbbls (million barrels) in the week ended November 14.
Distillate stocks decreased by 2.1 MMbbls (million barrels) last week versus analysts’ expectation for inventories to decrease between 1.4 and 2 MMbbls.
Last week, gasoline inventories increased by 1 MMbbls (million barrels) to 204.6 MMbbls.
US crude oil refinery inputs averaged 15.9 million bpd during the week ending November 14, 161,000 bpd higher than the previous week’s average.
Analysts were expecting a crude inventory draw of ~1 million barrels, but inventories instead increased by 2.6 MMbbls.
Crude oil inventory levels change based on demand and supply trends. Demand is primarily from refineries that process this crude into refined products.
According to ICSC-Goldman estimates, the lower fuel or gasoline prices we’ve seen recently saved consumers $90 billion annually. The Johnson Redbook index came in 3.9% higher year-over-year.
Higher fuel costs put pressure on operating costs, and can squeeze profit margins. The demand side also takes a hit. When gas prices are high, consumers tend to economize on transit by eliminating unnecessary trips.
In September 2014, the price index for meat stood at 267.7 compared to 264.3 in August. This index has been increasing sharply since the beginning of 2014.
According to the NRA, restaurant operators had a mixed outlook toward business conditions over the next six months. About 20% of operators expected business conditions to improve over the next six months, and about 19% of restaurant operators felt that business conditions would decline.
The six-month outlook for capital expenditures as of August 2014 was 100.7, and has been above the 100 level for the past twelve months. If this is true, the restaurant industry is on an uptrend.
Current situation same-store sales have been above the 100 level since March 2013, demonstrating consecutive expansion over 19 months. According to the NRA, 40% of operators have a positive outlook about the next six months’ same-store sales.
In September 2014, the current situation index was 101, which is an increase over 99.9 in September 2013. The expectations index was 100.9, which is also a year-over-year increase from 100.5 in September 2013.
The National Restaurant Association tracks the health of the restaurant industry in the US and provides a monthly outlook for it with its restaurant performance index.
The savings rate increased by 20 basis points (100 basis points = 1%) month-over-month, and disposable income remained flat month-over-month. On a year-over-year basis, meanwhile, disposable income increased 4%.
Average hourly earnings of production and non-supervisory employees increased to $20.70 in October from $20.61 in September. Personal income increased 0.2% month-over-month in September.
A falling unemployment rate alone is not reason enough to cheer. When we look at the labor force participation rate in the chart above, we see it too has been falling.