Gas prices are out of control as Energy Secretary Jennifer Granholm laughs it off. The poor and the middle class are getting blindsided by the Biden energy policies and now they want to do something about it.
Crude oil had been on a tear and fell faster than Biden’s poll numbers when the Energy Secretary laughed off higher US energy production saying that there was no magic wand to fix high gas prices. Now she is saying the Biden administration will investigate options to address the price at the pump.
Maybe she found the magic wand that President Donald Trump had that brought back manufacturing jobs to the US. The one that Biden said did not exist. Yet the Biden administration is in panic mode after the passage of the Build Back Better bill did not increase his poll numbers and it will only add to energy demand. The same energy that is now more controlled by OPEC and Russia because of the Biden administration's and the democrat's war on fossil fuels.
The expectations are that the Biden administration will try to drive down prices by a coordinated releasing of global oil reserves. That will of course only serve to break prices for the short term, but in the long term will only serve to make prices higher—and in the long run will ultimately give OPEC and Russia more power over global supply.
The way to beat OPEC is to unleash the US energy industry.
They are the cleanest most efficient producers on earth. Bloomberg reports that oil rallied above $82.00 a barrel as sharp price hikes from Saudi Arabia offered the latest signal that stockpiles globally are declining sharply and firing prices higher. Saudi Arabia made some of the biggest increases to its official selling prices in decades late last week, a move enabled by low global stockpiles and tight supplies, according to Vitol Group.
In a further sign of robust demand, the Terminal reported that Asian buyers will probably take their full contractual volumes of oil from Saudi Arabia for next month on strong fuel demand and improved margins, even after the kingdom hiked prices to the region.
Oil demand is also rising because the U.S. is lifting COVID restrictions for many foreign travelers. The U.S. will open its doors to travelers from Mexico, Canada, the UK, India, and most of Europe as of Monday and that will increase jet fuel and gasoline demand.
Diesel prices look to be near the bottom. Heating oil, that has struggled, should find new life. Look to buy the Biden dip. Look to buy the back end of the curve if they release oil.
The Biden administration is starting to realize that the green energy transition isn’t going to be easy. One must assume that their goal is to raise the price of gasoline and oil to such a high level that it squeezes the average consumer and forces them into alternatives. The problem is they’re going to find out that their alternatives are not going to be very much cheaper. The cost of electricity is also going to be on the rise.
ZeroHedge reported that Duke Energy Corporation (NYSE:DUK) warned Thursday that coal and natural gas supplies would be tight this winter, resulting in higher power prices for customers. Duke operates a diverse mix of power plants, including coal, hydro, natural gas, nuclear, solar, and wind, plus battery storage facilities across several regions and states, including the Carolinas, Florida, and Midwest.
Duke Energy CFO Steve Young said coal and natural gas prices are the highest since 2014, and these two essential commodities are in short supply. “It’s been a while,” since we’ve seen commodity prices like this. “The winter of 2014, we had a very cold polar vortex winter, and we saw spiking of gas prices,” Young said, who was quoted by Bloomberg on Thursday.
Natural gas is on a run. EBW analytics reports that,
“A cooler forecast shift over the weekend added 11 gHDDs and 17 Bcf of demand for natural gas as of Sunday evening—including colder changes at the end of the 11-15 day window heading into Thanksgiving—likely prompting upward price pressure early this week. Further, Sabine Pass feedgas indicates a long-awaited ramp-up at Train 6 is underway, likely presaging new all-time LNG demand records when Freeport runs at full strength."