As we all dutifully follow the advice of our nation’s foremost experts and hunker down at home to celebrate Thanksgiving, there are two thoughts I can’t get out of my mind. Sell oil, buy gas.
**The below ‘analysis’ is only for fun. It’s very loosely vetted and makes all kinds of wild assumptions**
During a typical (aka, non 2020) year, roughly 32 million Americans board planes to convene with family and celebrate Turkey Day. But this year, not so much. If we look at TSA passenger throughput from the beginning of the year, we see the image we would all expect to see. Air travel has risen consistently since the low experienced in April, but still hovers around 35% of 2019. Considering the nearly ubiquitous message to cancel your Thanksgiving travel plans, it looks like the holiday won’t provide the travel boost it has in past years.
Planes burn jet fuel, cars burn gasoline. Cutting to the chase, we’re doing a lot less of both and thus actively (more like inactively) contributing to oil demand destruction. But the one thing we will burn more of is natural gas. Why, you ask? If we aren’t joining family and friends, we’re all stuck cooking for ourselves. That means millions of additional ovens preparing our Thanksgiving feasts.
How many ovens, you ask? Let’s do some quasi-analysis to find out. If 32 million people typically travel during the Thanksgiving holiday, and the trend we’ve seen in airline passengers continues, roughly 21 million people will stay home. Assuming an average of 3 people traveling per household, roughly 7 million additional ovens could fire up this coming Thursday.
While those numbers sound impressive, the unfortunate truth is that ovens just don’t burn much gas and many are electric (get long renewables?). So instead of going all-in on my long gas trade, I’ll enjoy some more quality time with my immediate family.
We hope everyone is staying safe and healthy this Thanksgiving!