AI Summary
5 min readOil inventories are getting dangerously low, and gas prices are likely headed higher this summer
The United States has been drawing down its commercial and strategic oil reserves at a striking pace. Crude inventories fell another 7.2 million barrels this week, bringing the total drawdown to nearly 80 million barrels since the war started. There are still hundreds of millions of barrels left, but as Aaron Brady of S&P Global Energy explains, a large portion of what remains is simply not accessible — oil at the bottom of storage tanks that cannot be pumped out. He estimates that roughly 290 million of the 426 million barrels now in U.S. inventory are effectively unusable. At the current drawdown rate, Brady says sometime in July is when the country enters the "danger zone" where inventories approach minimum operating levels. Even if the war ended today, it would take months to restore the global supply chain.
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What you'll learn
- 1 (01:36) **Oil Markets and Gas Prices** - Oil prices are down despite geopolitical turmoil, but inventories are being drawn down dangerously low
- 2 (05:00) **Treasury Yields and Inflation Concerns** - The Treasury auctions off long-term debt as investors demand higher yields on short-term bonds
- 3 (08:00) **Massive Summer IPOs: SpaceX, Anthropic, OpenAI** - Three huge tech IPOs are planned, but their market impact may be smaller than it seems
- 4 (10:47) **World Cup Begins, But Kansas City Short-Term Rental Boom Fizzles** - The tournament starts in Mexico City, but Kansas City hosts who expected a windfall are struggling
- 5 (15:48) **Market Numbers** - Dow up 929 points, NASDAQ up 640 points, S&P 500 up 127 points
- 6 (19:00) **Inflation Data and Economic Outlook** - Kai Ryssdal discusses CPI and PPI with economist Karen McDaniel
- 7 (23:27) **Rural Veterinarian Shortage** - A Wyoming vet clinic struggles to find successors as rural areas face a critical lack of large-animal vets
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Show Notes
Hate to be the bearer of bad news, but all three economists we asked say gas prices are due for another hike this summer. The war in Iran continues to drain oil reserves in the U.S. and abroad, and eventually prices will have to match growing supply-demand tension. (Yes, that’s even if the war ends today.) Also in this episode: Bond investors expect inflation to stick around for a while, a trio of upcoming IPOs will barely put a dent in total market cap, and Kansas City short-term rental demand disappoints as World Cup kicks off.
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