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“Very Crooked Numbers”: Biden Admin Accused Of Fabricating Low Gas Demand Data To Hammer Price Of Oil

"Very Crooked Numbers": Biden Admin Accused Of Fabricating Low Gas Demand Data To Hammer Price Of Oil

Something very odd is taking place in…

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"Very Crooked Numbers": Biden Admin Accused Of Fabricating Low Gas Demand Data To Hammer Price Of Oil

Something very odd is taking place in the oil market: on one hand, when it comes to physical, buyers can't seem to get enough: as we noted earlier Saudi prices for Asian buyers just hit a new record high, a clear indicator of relentless demand for physical oil no matter the price...

... and yet at the same time, oil prices have tumbled today amid continued fears that demand for oil, and especially gasoline, will collapse when the US, Europe and the UK slumps into a recession... or already has.

As our friends at ForexLive point out, the trigger behind today's plunge in oil prices is gasoline demand, which as we noted yesterday, showed that for July, gasoline demand (on a trailing 4 week basis) slumped below 2020 levels.

Intuitively, ForexLive cautions, "that doesn't make sense. Yes, gasoline prices are much higher than 2020 but the world was in the midst of a pandemic and far more people were working from home in the summer of 2020."

But the data is what it is and yesterday's numbers were soft once again at 8540k. That was the main reason for the drop in oil yesterday and the decline through $90 today for the first time since the start of the Ukraine war. Next, ForexLive's Adam Button runs through a quick list of factors laying out the arguments for both sides:

Why it might be true:

  • 1) Elasticity: Gasoline is traditionally one of the least-elastic commodities -- people need to drive. However there's a limit and we may have it it in early July as gasoline cracks below out and US prices hit record highs. Around the July 4th weekend there were clear signs of demand destruction. Perhaps we hit a breaking point and drivers are cutting discretionary miles whereever possible.
  • 2) Efficiency: There's no doubt that cars are getting more efficient and people are switching to EVs and hybrids. That's a secular trend that will weigh on gasoline demand in the long term. But compared to a year ago? The auto cycle is a long one and it will chip away at demand, but at a slow pace.
  • 3) Flying more: The idea is that people and families are flying more this summer and driving less. Intuitively it makes sense. People were stuck driving to nearby locations for vaction for two years and now are branching out further. We've all see the nightmares at airports and flying is as busy as ever. Is that killing driving demand? Possibly but given that so much of driving is commuting and errands, it's hardly believable that it could account for a 10% decline in demand.
  • 4) Running on empty: According to GasBuddy, US retail gasoline prices have now fallen for 49 straight days. Following the gasoline price shock in late June, we could be seeing a behaviour shift in drivers where they are waiting longer to fill up gas tanks. That has been the right move for the past seven weeks and the drawdown in collective gas tanks could temporarily be masking demand.
  • 5) Commercial pumps: The EIA data measures commercial gasoline demand -- so from gasoline stations rather than consumers -- so similar to the above, we could be seeing gasoline stations running with less inventory. That makes sense because right now the value of inventory is falling daily. Again, this would only be masking demand.
  • 6) A sign of recession: All the talk of recession may have people cutting back on driving and spending. We've heard from Visa lately that's not the case but weekly gasoline demand is some of the most up-to-date data out there. But if gasoline demand is falling this rapidly, what does it say about the rest of the economy?
  • 7) Price is falling: Both crude and gasoline prices are falling and today oil is at the lowest since February. Could implied gasoline demand data really be fooling the market? There are reports on physical tightness and paper crude could be liquidating but I have a hard time believing that US demand figures are a major reason for oil weakness.

Why it might not be true:

  • 1) EIA data is subject to major revisions: The EIA does its best to get out petroleum data weekly but it's a tough job and subject to all kinds of assumptions. HFI Reserach notes that the data is subject to big revisions when the month numbers are finally released. So traders may be simply looking at bad data that will be adjusted.

  • 2) US gasoline storage remains at a five year low: Given cracks and pressure on to boost gasoline output, refiners have been working hard this summer. Combined with supposed lower demand, inventories should be moving up rapidly. Despite some progress, inventories are basically flat in the last month and still at five-year lows. This is another HFI chart and their explanation is well-worth reading.

  • 3) Refiners aren't seeing a slowdown: US refining giant Valero was asked about falling gasoline demand last week and Gary Simmons, Chief Commercial Officer, had this to say: "I can tell you, through our wholesale channel there is really no indication of any demand destruction... In June, we actually set sales records. We read a lot about demand destruction and mobility data showing in that range of 3% to 5% demand destruction. Again, we're not seeing it in our system."
  • 4) Alternate data doesn't line up: GasBuddy tracks retail gasoline demand at the pumps in the US and they showed a 2% rise in gasoline demand last week while the EIA showed a 7.6% drop. Morevoer, last week was the strongest demand of the year from GasBuddy.

Another data point shows vehicle miles traveled from the US Federal Highway Administration. While it's only though May, it shows vehicle miles traveled up materially year-over-year through May. We'll get the June data in the middle of this month.

  • Conspiracy: Some are have gone so far as to accuse the Biden administration of explicitly "cooking the numbers" to depress the price of oil. As a reminder, in late-June the EIA shut down reporting for several weeks, supposedly due to a server malfunction; however since they have returned, the gasoline demand data has been consistently bad. "Maybe there's an issue with reporting or maybe it's a conspiracy", according to ForexLive.

But it's not just same anonymous twitter randos screaming foul: last week Bank of America energy strategist Doug Legate published a note (available to pro subs in the usual place) titled the "fall of gasoline demand appears grossly exaggerated" in which he noted that last week we finally got the post July 4th rebound he suggested could follow the 4th of July holiday. "For the week ending July 22nd, implied gasoline demand rebounded to 9.2 million b/d - a 1 million b/d increase vs the last two week average, and the second highest level of 2022." Curiously, right after that, however, we got a steep drop.

So steep, in fact, that Piper Sandler global energy strategist at Piper Sandler, yesterday called the data "crooked":

"What is more bearish to the market is this notion that gasoline demand is falling away; we think that's a very mistaken notion based on very crooked numbers from the [DOE] weekly data set... The way that the numbers are computed leaves significant room for error. We are supposed to believe that in July, in the middle of driving season we are only using 8.6 million barrels per day. That would be down half a million barrels a day from May of this year; that would be below the Covid low of 2020. So we ask all the refiners, we ask all the retailers, we ask everybody that reported earnings this season. Every single one of them tells you that their sales are not down materially from even pre-covid days. Some report record high sales."

If there is indeed "crooked" data, it comes at a strategic time: just as Brent tumbled below the 200DMA, in the process triggering systematic sell orders which push the notoriously momentum-chasing also community short the commodity.

Alas, as Adam Button concludes, "at the end of the day traders have to trade what's in front of them. Right now it's a crude chart that's breaking support after a major period of consolidation -- that's not good. The calls for a recession are growing louder crude demand has a long history of following global growth. There are supply factors that will eventually be bullish -- like the SPR releases ending in October -- but that's months away and OPEC is still adding some barrels."

Finally, for those wondering to what lengths the Biden admin would be willing to go to hammer the price of oil, and gas at the pump, sharply lower ahead of the midterms, we remind you what is going on with the US strategic midterm petroleum reserve which has been drained by 110 million barrels since the start of the Ukraine war (with much of it going to China) to levels last seen in May 1985.

One better hope the US doesn't encounter a real emergency in the next few weeks, beyond more than just Biden's approval rating hitting an all time low.

Tyler Durden Thu, 08/04/2022 - 14:03

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Analyst reviews Apple stock price target amid challenges

Here’s what could happen to Apple shares next.

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March 12, 2024

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They said it was bound to happen.

It was Jan. 11, 2024 when software giant Microsoft  (MSFT)  briefly passed Apple  (AAPL)  as the most valuable company in the world.

Microsoft's stock closed 0.5% higher, giving it a market valuation of $2.859 trillion. 

It rose as much as 2% during the session and the company was briefly worth $2.903 trillion. Apple closed 0.3% lower, giving the company a market capitalization of $2.886 trillion. 

"It was inevitable that Microsoft would overtake Apple since Microsoft is growing faster and has more to benefit from the generative AI revolution," D.A. Davidson analyst Gil Luria said at the time, according to Reuters.

The two tech titans have jostled for top spot over the years and Microsoft was ahead at last check, with a market cap of $3.085 trillion, compared with Apple's value of $2.684 trillion.

Analysts noted that Apple had been dealing with weakening demand, including for the iPhone, the company’s main source of revenue. 

Demand in China, a major market, has slumped as the country's economy makes a slow recovery from the pandemic and competition from Huawei.

Sales in China of Apple's iPhone fell by 24% in the first six weeks of 2024 compared with a year earlier, according to research firm Counterpoint, as the company contended with stiff competition from a resurgent Huawei "while getting squeezed in the middle on aggressive pricing from the likes of OPPO, vivo and Xiaomi," said senior Analyst Mengmeng Zhang.

“Although the iPhone 15 is a great device, it has no significant upgrades from the previous version, so consumers feel fine holding on to the older-generation iPhones for now," he said.

A man scrolling through Netflix on an Apple iPad Pro. Photo by Phil Barker/Future Publishing via Getty Images.

Future Publishing/Getty Images

Big plans for China

Counterpoint said that the first six weeks of 2023 saw abnormally high numbers with significant unit sales being deferred from December 2022 due to production issues.

Apple is planning to open its eighth store in Shanghai – and its 47th across China – on March 21.

Related: Tech News Now: OpenAI says Musk contract 'never existed', Xiaomi's EV, and more

The company also plans to expand its research centre in Shanghai to support all of its product lines and open a new lab in southern tech hub Shenzhen later this year, according to the South China Morning Post.

Meanwhile, over in Europe, Apple announced changes to comply with the European Union's Digital Markets Act (DMA), which went into effect last week, Reuters reported on March 12.

Beginning this spring, software developers operating in Europe will be able to distribute apps to EU customers directly from their own websites instead of through the App Store.

"To reflect the DMA’s changes, users in the EU can install apps from alternative app marketplaces in iOS 17.4 and later," Apple said on its website, referring to the software platform that runs iPhones and iPads. 

"Users will be able to download an alternative marketplace app from the marketplace developer’s website," the company said.

Apple has also said it will appeal a $2 billion EU antitrust fine for thwarting competition from Spotify  (SPOT)  and other music streaming rivals via restrictions on the App Store.

The company's shares have suffered amid all this upheaval, but some analysts still see good things in Apple's future.

Bank of America Securities confirmed its positive stance on Apple, maintaining a buy rating with a steady price target of $225, according to Investing.com. 

The firm's analysis highlighted Apple's pricing strategy evolution since the introduction of the first iPhone in 2007, with initial prices set at $499 for the 4GB model and $599 for the 8GB model.

BofA said that Apple has consistently launched new iPhone models, including the Pro/Pro Max versions, to target the premium market. 

Analyst says Apple selloff 'overdone'

Concurrently, prices for previous models are typically reduced by about $100 with each new release. 

This strategy, coupled with installment plans from Apple and carriers, has contributed to the iPhone's installed base reaching a record 1.2 billion in 2023, the firm said.

More Tech Stocks:

Apple has effectively shifted its sales mix toward higher-value units despite experiencing slower unit sales, BofA said.

This trend is expected to persist and could help mitigate potential unit sales weaknesses, particularly in China. 

BofA also noted Apple's dominance in the high-end market, maintaining a market share of over 90% in the $1,000 and above price band for the past three years.

The firm also cited the anticipation of a multi-year iPhone cycle propelled by next-generation AI technology, robust services growth, and the potential for margin expansion.

On Monday, Evercore ISI analysts said they believed that the sell-off in the iPhone maker’s shares may be “overdone.”

The firm said that investors' growing preference for AI-focused stocks like Nvidia  (NVDA)  has led to a reallocation of funds away from Apple. 

In addition, Evercore said concerns over weakening demand in China, where Apple may be losing market share in the smartphone segment, have affected investor sentiment.

And then ongoing regulatory issues continue to have an impact on investor confidence in the world's second-biggest company.

“We think the sell-off is rather overdone, while we suspect there is strong valuation support at current levels to down 10%, there are three distinct drivers that could unlock upside on the stock from here – a) Cap allocation, b) AI inferencing, and c) Risk-off/defensive shift," the firm said in a research note.

Related: Veteran fund manager picks favorite stocks for 2024

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Major typhoid fever surveillance study in sub-Saharan Africa indicates need for the introduction of typhoid conjugate vaccines in endemic countries

There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high…

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There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.

Credit: IVI

There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.

 

The findings from this 4-year study, the Severe Typhoid in Africa (SETA) program, offers new typhoid fever burden estimates from six countries: Burkina Faso, Democratic Republic of the Congo (DRC), Ethiopia, Ghana, Madagascar, and Nigeria, with four countries recording more than 100 cases for every 100,000 person-years of observation, which is considered a high burden. The highest incidence of typhoid was found in DRC with 315 cases per 100,000 people while children between 2-14 years of age were shown to be at highest risk across all 25 study sites.

 

There are an estimated 12.5 to 16.3 million cases of typhoid every year with 140,000 deaths. However, with generic symptoms such as fever, fatigue, and abdominal pain, and the need for blood culture sampling to make a definitive diagnosis, it is difficult for governments to capture the true burden of typhoid in their countries.

 

“Our goal through SETA was to address these gaps in typhoid disease burden data,” said lead author Dr. Florian Marks, Deputy Director General of the International Vaccine Institute (IVI). “Our estimates indicate that introduction of TCV in endemic settings would go to lengths in protecting communities, especially school-aged children, against this potentially deadly—but preventable—disease.”

 

In addition to disease incidence, this study also showed that the emergence of antimicrobial resistance (AMR) in Salmonella Typhi, the bacteria that causes typhoid fever, has led to more reliance beyond the traditional first line of antibiotic treatment. If left untreated, severe cases of the disease can lead to intestinal perforation and even death. This suggests that prevention through vaccination may play a critical role in not only protecting against typhoid fever but reducing the spread of drug-resistant strains of the bacteria.

 

There are two TCVs prequalified by the World Health Organization (WHO) and available through Gavi, the Vaccine Alliance. In February 2024, IVI and SK bioscience announced that a third TCV, SKYTyphoid™, also achieved WHO PQ, paving the way for public procurement and increasing the global supply.

 

Alongside the SETA disease burden study, IVI has been working with colleagues in three African countries to show the real-world impact of TCV vaccination. These studies include a cluster-randomized trial in Agogo, Ghana and two effectiveness studies following mass vaccination in Kisantu, DRC and Imerintsiatosika, Madagascar.

 

Dr. Birkneh Tilahun Tadesse, Associate Director General at IVI and Head of the Real-World Evidence Department, explains, “Through these vaccine effectiveness studies, we aim to show the full public health value of TCV in settings that are directly impacted by a high burden of typhoid fever.” He adds, “Our final objective of course is to eliminate typhoid or to at least reduce the burden to low incidence levels, and that’s what we are attempting in Fiji with an island-wide vaccination campaign.”

 

As more countries in typhoid endemic countries, namely in sub-Saharan Africa and South Asia, consider TCV in national immunization programs, these data will help inform evidence-based policy decisions around typhoid prevention and control.

 

###

 

About the International Vaccine Institute (IVI)
The International Vaccine Institute (IVI) is a non-profit international organization established in 1997 at the initiative of the United Nations Development Programme with a mission to discover, develop, and deliver safe, effective, and affordable vaccines for global health.

IVI’s current portfolio includes vaccines at all stages of pre-clinical and clinical development for infectious diseases that disproportionately affect low- and middle-income countries, such as cholera, typhoid, chikungunya, shigella, salmonella, schistosomiasis, hepatitis E, HPV, COVID-19, and more. IVI developed the world’s first low-cost oral cholera vaccine, pre-qualified by the World Health Organization (WHO) and developed a new-generation typhoid conjugate vaccine that is recently pre-qualified by WHO.

IVI is headquartered in Seoul, Republic of Korea with a Europe Regional Office in Sweden, a Country Office in Austria, and Collaborating Centers in Ghana, Ethiopia, and Madagascar. 39 countries and the WHO are members of IVI, and the governments of the Republic of Korea, Sweden, India, Finland, and Thailand provide state funding. For more information, please visit https://www.ivi.int.

 

CONTACT

Aerie Em, Global Communications & Advocacy Manager
+82 2 881 1386 | aerie.em@ivi.int

Journal

The Lancet Global Health

Method of Research

Observational study

Subject of Research

People

Article Title

Incidence of typhoid fever in Burkina Faso, Democratic Republic of the Congo, Ethiopia, Ghana, Madagascar, and Nigeria (the Severe Typhoid in Africa programme): a population-based study

Article Publication Date

12-Mar-2024

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US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever… And Debt Explodes

US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever… And Debt Explodes

Earlier today, CNBC’s…

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US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever... And Debt Explodes

Earlier today, CNBC's Brian Sullivan took a horse dose of Red Pills when, about six months after our readers, he learned that the US is issuing $1 trillion in debt every 100 days, which prompted him to rage tweet, (or rageX, not sure what the proper term is here) the following:

We’ve added 60% to national debt since 2018. Germany - a country with major economic woes - added ‘just’ 32%.   

Maybe it will never matter.   Maybe MMT is real.   Maybe we just cancel or inflate it out. Maybe career real estate borrowers or career politicians aren’t the answer.

I have no idea.  Only time will tell.   But it’s going to be fascinating to watch it play out.

He is right: it will be fascinating, and the latest budget deficit data simply confirmed that the day of reckoning will come very soon, certainly sooner than the two years that One River's Eric Peters predicted this weekend for the coming "US debt sustainability crisis."

According to the US Treasury, in February, the US collected $271 billion in various tax receipts, and spent $567 billion, more than double what it collected.

The two charts below show the divergence in US tax receipts which have flatlined (on a trailing 6M basis) since the covid pandemic in 2020 (with occasional stimmy-driven surges)...

... and spending which is about 50% higher compared to where it was in 2020.

The end result is that in February, the budget deficit rose to $296.3 billion, up 12.9% from a year prior, and the second highest February deficit on record.

And the punchline: on a cumulative basis, the budget deficit in fiscal 2024 which began on October 1, 2023 is now $828 billion, the second largest cumulative deficit through February on record, surpassed only by the peak covid year of 2021.

But wait there's more: because in a world where the US is spending more than twice what it is collecting, the endgame is clear: debt collapse, and while it won't be tomorrow, or the week after, it is coming... and it's also why the US is now selling $1 trillion in debt every 100 days just to keep operating (and absorbing all those millions of illegal immigrants who will keep voting democrat to preserve the socialist system of the US, so beloved by the Soros clan).

And it gets even worse, because we are now in the ponzi finance stage of the Minsky cycle, with total interest on the debt annualizing well above $1 trillion, and rising every day

... having already surpassed total US defense spending and soon to surpass total health spending and, finally all social security spending, the largest spending category of all, which means that US debt will now rise exponentially higher until the inevitable moment when the US dollar loses its reserve status and it all comes crashing down.

We conclude with another observation by CNBC's Brian Sullivan, who quotes an email by a DC strategist...

.. which lays out the proposed Biden budget as follows:

The budget deficit will growth another $16 TRILLION over next 10 years. Thats *with* the proposed massive tax hikes.

Without them the deficit will grow $19 trillion.

That's why you will hear the "deficit is being reduced by $3 trillion" over the decade.

No family budget or business could exist with this kind of math.

Of course, in the long run, neither can the US... and since neither party will ever cut the spending which everyone by now is so addicted to, the best anyone can do is start planning for the endgame.

Tyler Durden Tue, 03/12/2024 - 18:40

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