The Weekly Bear: How to Play The Gas Slump

Gas tax collections declined 3.6% in July. This followed increases in May and June but collections have mostly been trending lower as gas prices have risen. This is consistent with the EIA data on gasoline demand, which shows a trend of weaker demand (chart below).

The US EIA reports gasoline demand weekly with a lag of less than a week. This is another source of near real-time data, which the media ignores, that is useful as an indicator of how the economy is doing right now.

Here we see the weakness of most US consumers. Despite the tax cut and tales of job growth and a growing economy, demand was barely higher in the July peak driving season than July 2017. That followed a stronger June spurred by lower prices. May had been very weak and demand slowed again in July.

On an unsmoothed basis, the growth rate had peaked at 9% in January. But then gas prices began rising and the growth rate turned negative in March, and have turned even more negative here in August as the nationwide average price for regular gas hovered around $2.75 per gallon.

This behavior shows that demand is elastic and price constrained. With prices holding near the high, consumption is clearly trending down. It is another signal that the gains in top line economic data are attributable to gains at the top of the economic pyramid. The base is getting weaker. As the base is hollowed out over time, eventually the pyramid will implode.

In the meantime, I’d like to introduce you to Dr. Kent Moors, our resident oil and gas expert, and talk about a more near-term way to profit from this gas situation.

How You Could Profit From Gas with This Energy Expert

Dr. Kent Moors has been in the oil and energy business for nearly four decades. As an energy consultant for 27 different governments and a former intelligence officer, he’s forgotten more about energy than most of us will ever learn. He has a global network of contacts who give him the latest goings on in most governments around the world.

So when he has an oil and energy recommendation, it’s always best to listen to him. Kent’s open track record is mostly in the green, and he has a knack for selecting the best-performing oil driller and refiner opportunities around. Kent’s Oil & Energy Investor newsletter also gives you the latest on what’s happening in oil and energy.

If you’d like to get access to all his research free of charge, just click here.

But Kent has much more than that up his sleeve…

In his Energy Advantage portfolio, there is a stock that is right in the middle of a new weapon technology that could completely change the game. It’s developing this tech for $175 million, in addition to net sales shooting up by 5.5% year-over-year.

And it could grow even more as the year goes on. You don’t want to miss out on these kinds of opportunities, so click here to learn more about Energy Advantage.

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