As the above chart shows, there has been a decline in total US gasoline stocks since 1993. Even though many people claimed that the bull market in commodities is over, I disagree.
Not only gasoline stocks are low, but almost all commodities' inventories are in record low. Specially, agricultural commodities' stocks are at 25-year lows. This is extremely supportive of high commodity prices for the time being. I strongly believe the current downturn in crude is just a short-term correction.
If we were in the "top" of the alleged commodities "bubble", we would see inventories hitting record highs, not record lows. Remember that the definition of a bubble is rising supply and increasing price, something that we are not seeing right now. In other words, the commodities bull market has a long way to go (Usually bull and bear markets in commodities last 18-25 years) The current bull market started in 1998 and could last at least until 2016.
Disagree? Agree? Tell me what you think
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