Diesel fuel demand -- the best economic indicator ?
We have an endless flow of economic news but the best indicator comes from petroleum industry statistics published by EIA -- diesel fuel demand. When goods have to be shipped from manufacturer to consumer, the trucking industry does its job and consumes diesel fuel in the process. Consistent with the slide into economic recession, diesel fuel demand began to flatten out during the 2nd half of 2007. In January 2008, demand went into a deep and sustained decline. Year over year, diesel fuel demand declined for 23 consecutive months (Jan 2008 through Nov 2009).
Demand began to recover in March 2010. Year over year growth averaged 6.45% for Q2 2010 and 6.4% for Q3 2010. For Q4 2010, we expect demand to increase 3-4% vs. 2009.
The most important advantage for using diesel fuel demand as an economic indicator is its timeliness. We use EIA weekly statistics to determine monthly demand in near real time. In contrast, most other economic statistics from the federal government are not as timely and are subject to revisions.
