Matt Simmons: Searing Summer of Gasoline Shortages

Energy investment banker, author takes stock of U.S. gasoline inventories and finds problems ahead.

Here is a quick run down on the possible disaster we face this summer as we head into Memorial Day with the lowest beginning-of-driving-season stocks in US history. It would have been convenient had someone found out exactly what Minimum Operating Levels* really have become. I suspect we will answer this riddle this summer.

Minimum Operating Levels of petroleum inventories are when all cushions have been used up and the system is now starting to


The reality of gasoline demand is that it will rise during July and August unless we have some roads blocked off to stem demand. Rising late-summer demand has happened almost every year, even as prices rose from $1/gallon to over $3!

To supply this market, several things have to work in unison.

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