Oil is back over $85 per barrel (and now Nat Gas and Coal are firming). Let's take a look at the EIA data (not that this is any longer indicative of any price signal... I am going somewhere else with this). Hit the link, and scroll down to Table 1., and then down to "Products Supplied".
While gasoline BY VOLUME has experienced a slight increase in YOY supply, by BTU's, gasoline YOY supply by BTU has remained flat as ethanol production (and consumption) has increased 8.2% and ethanol contains 65% of the BTU's of gasoline. Diesel & Jet fuel supplies has fallen YOY; this is notable considering how far of a decline 2009 was from 2008 in these fuels. Propane is up a bit, with the biggest gain coming from "Other Oils", that is: Bunker fuel, asphalt, etc.. defined by the EIA as: "Oils with a boiling range equal to or greater than 401ยบ F that are intended for use as a petrochemical feedstock". In other words, the stuff that cannot be used in transportation fuels but can be used in industry.
To sum it up: Imports are down 8.9% YOY, and all products supplied OTHER than industrial/petrochemical feedstocks are down a a rough average 3% YOY. Since this is coming off a crash in the 2008/2009 year over comparisons that 3% is somewhat more dramatic than it might otherwise appear.
After reviewing the dramatic increase in ethanol and domestic production of of Crude & NGL's since 2005 (the more I examine this the more I believe the doomers would have been right had it not been for ethanol and hurricanes Katrina & Rita (which created slack in the production system)), it then follows that the question really is: can the U.S. continue to increase these items to make up for the loss of imports IF those imports continue on their rate of decline(?). Since the U.S. is consuming 42.5% of its corn crop (using last quarter's numbers) to produce ethanol it would appear that the answer is "NO" regarding ethanol. Given that the industry is shuttering refining plants and removing a large portion of refining capacity it would appear that the industry has voted with its $$ a big NO on a significant increase in production capacity. Further, Transocean's experience last week with a blow out in GOM that killed 11 of their workers and sunk a $360 deep water drilling ship would lead me to believe that these very deep water and deeper Terra fields are not going to give up their resources cheaply.
The U.S. has pulled out all of the stops in order to keep the headline unemployment number under 10%, flooding the system with liquidity and cheap credit... with the unintended consequence that Oil is creeping back into the danger zone - this is the "Rock and a Hard Place" we have been speaking about - and any economic recovery or contraction is entirely tied to Oil.