US Travelers decided to declare their independence by taking trains and automobiles to travel from, sea to beautiful shining sea, states Phil Flynn of PRICE Futures Group.

By air, it was a Yankee doodle dandy as the TSA announced that it had recorded its highest-ever number of passengers screened in a single day. Taking place on June 30th, 2023, the agency said it had screened 2,883,595 individuals at facilities across the country. The number of people flying in the US has risen above pre-covid levels for the first time, with ~2.883 million passengers crossing an airport TSA checkpoint on Friday, slightly above the 2019 Thanksgiving peak. Gasoline demand is also near records. According to GasBuddy data, US gasoline demand rose 4.3% from last week and was 4.5% above the four-week average at gasoline demand at 9.45mbpd. Other sources predict gasoline demand could exceed 10 million barrels a day. Our Founding Fathers would be proud as we exercise our alienable Rights, among these are Life, Liberty, and the pursuit of happiness by using lots of fossil fuels.

These good demand numbers are extremely impressive in terms of and do not fit the narrative that demand is going to somehow drop in the second half of the year. The contango in the futures market some suggest signals a lot of supply and a potential slowdown in the economy where we see it as the market is suggesting a tightening in the second half of the year the question is going to be the degree of the tight tightening. And keep in mind that instead of releasing oil from the strategic petroleum reserve we’re going to start buying it back.

RigZone reported that “The US Department of Energy (DOE) has awarded contracts for 3.2 million barrels of locally produced crude for over $230.34 million in another purchase to refill the Strategic Petroleum Reserve (SPR) after war-induced releases. These contracts are for the invitation announced last month when the DOE awarded contracts for three million barrels. Macquarie Commodities Trading US LLC scored the biggest deal in the latest purchase with 1.5 million barrels, followed by Shell Trading Co. and Sunoco Partners Marketing and Terminals LP with 600 million barrels each. Atlantic Trading and Marketing Inc. is to supply 500 million barrels. These are scheduled for delivery in September and will be injected into the Big Hill SPR storage site in Texas state’s Jefferson County, the DOE said in a press release Friday. The same storage is to receive the three million barrels whose contracts were awarded in June, due for delivery in August. “The 3.2 million barrels are being purchased for an average price of about $71.98 per barrel, lower than the average of about $95 per barrel that SPR crude was sold for in 2022, securing a good deal for taxpayers”, the department said. The contracts awarded last month had an average price of around $73 a barrel.

The DOE plans to issue another invitation for SPR purchases this week. On top of that the Saudi Arabian one million barrel-a-day production cut is in effect. Reuters reports that “India’s imports of Russian oil hit another record last month as the South Asian nation potentially nears the limit of its buying splurge from the major OPEC+ producer. Bloomberg reports that “China Is Buying Gas Like There’s Still an Energy Crisis” Bloomberg writes that  “A lack of coal—China’s mainstay fuel for power generation—triggered widespread electricity curtailments to factories for a brief period in 2021, while a drop in hydropower output prompted a shortage in 2022, slowing economic growth. In response, the country vowed to increase mining capacity, and production has risen to record levels, keeping storage sites well stocked and reducing imports last year.

Russian Deputy Prime Minister Alexander Novak studies export quotas for oil products quote we have instructed oil companies to give priority to supplying gasoline to the domestic market even in situations where exports seem more profitable. In other words, unlike speculators, they are betting on tight supply.

Z Man Energy reports that WTI shorts at a new high for 2023, up 3x since the start of the year. Longs are essentially where they were at the start of the year. The long-short ratio is at a multi-year low.

Learn more about Phil Flynn by visiting Price Futures Group.