This one does not seem to be typical (which would mean a warmer winter, and less need for fuel) and some caution is now being expressed.
But with this "black sheep" El Niño, as he calls it, "as you move to the central and eastern regions, you start to see pitfalls and [different] opinions."Earlier predictions of a strong El Nino and resulting impact on climate and global temperatures seem now to be fading into a forgotten past. But with the situation now indeterminate, we’ll just have to wait and see how the weather turns out.
What that means for the natural gas-reliant Midwest and home-heating-oil usage in the Northeast is that El Niño's influence could wane as it crosses the country. As a result, other weather phenomena could at times take precedence, so a warm winter isn't a given, Schlater says. "From the central Rockies to the Ohio Valley, you could see temperature volatility," he says.
Adam Sieminski, an analyst at Deutsche Bank, concurs and notes that the winters of 2002-03 and 2004-05 had weak to moderate El Niños but were very cold in the Midwest and East. "While we do not anticipate a repeat of those events, the pattern is shaping up such that the 'warm winter' may be confined to the Pacific Northwest to the Northern Plains, making the East favorable for colder-than-normal conditions, possibly along the lines of 2004-05," he said in a note.
Getting back to the TWIP, one of the graphs that is interesting to watch is domestic crude production, which has been increasing for a while – wonder how long that will last?
Domestic crude Production over the past year (EIA )
But it is gasoline demand that shows that something at least is growing in the economy.
The downturn marks the seasonal transition from producing gasoline for summer driving, to preparing fuels for the winter. Nevertheless, if one goes over to the FHWA for the monthly traffic report for July, one sees that travel was up 2.3% over July 2008. The Texas area was highest with a 2.9% increase, while the North East was held to only 1.4% gain.
This result means that the 12-month rolling average for Vehicle Miles Driven (VMD) now definitely shows an uptick over the depth of the recession in driving.
Moving 12-month total of VMD on all Roads (source FHWA
The rise back to the old peak levels will likely take more than another year or so, but will help indicate where we stand. (Bear in mind however that July is now 3-months ago, and so the recovery today should be more marked). Urban driving, while still up over last year, is not as far along on this as is rural driving, where the numbers now nearly match this time in 2007 – before the recession and gas prices both came seriously into play.