While oil prices fluctuate on concerns about Chinese demand and handicapping geopolitical risk factors there is at least one campaign that is preparing for the coming energy crunch. It’s the Green New Deal virus energy realities that are on the ballot.
One campaign has realistic solutions that put the energy power back into the private sector with limited taxpayer dollars spent adding strategic nuclear and lifting impedance to oil and gas production. They also want to encourage clean LNG exports to the world.
That is a stark contrast to an agenda that promises massive government spending on a green energy dream that is an inefficient boondoggle failure and a waste of billions of dollars of taxpayer money on electric cars that no one wants, costing automakers billions in losses and charging station that is never built, just to name a few.
But before we get to that, oil prices that have been sidetracked by the Israeli-Hamas conflict should not be surprised that has rejected the US hostage-ceasefire proposal that Antony Blinken said was the last best hope for peace.
And while oil prices have been hit hard on concerns of weak oil demand in China and not concerned that US crude supplies have fallen 6 out of the last 7 weeks or that we are in a global oil supply deficit at this moment, the lack of global oil spare capacity and the amount of underinvestment is a simmering risk against the US and global economy.
We should also see crude supply resume its crude draw this week. We are looking for crude down 2 million barrels or gasoline supply is down 2 million barrels and distillate to down 2 million barrels and runs unchanged.
While the Biden Harris campaign has rallied against natural gas and fossil fuels, it gave OPEC more power as global spare production capacity is tightening. Now with the possibility that US oil production may be nearing a peak, it puts all the world’s oil spare capacity mainly in Saudi Arabia.
S&P Global reported, “Support for crude markets is hinging on OPEC’s spare capacity as global demand continues to grow." Ben Rodgers, APA Corp warns, “If the Permian starts to flatten, US production growth will moderate in coming years, putting a lot of power in OPEC's hands.”
The failure of the Green New Deal to add electric capacity or have a real plan to meet the growing demand for power and the reality that a Biden/Harris EPA rule would lead to sharply higher electricity bills as well as electricity shortages.
The EPA rule, which a federal appeals court ruled last month could be enforced, requires coal-fired power plants to shut down if they cannot capture 90% of their carbon emissions starting in 2032 according to the New York Post.
Trump said Monday, “I am announcing today that when I return to the White House, I will end this anti-American-energy crusade and terminate Kamala’s so-called Power Plant Rule,’ “Instead of shutting down power plants, we will open dozens and dozens more.”
He said that in regards to Vice President Harris, the co-sponsor for the Green New Deal “Kamala stands for energy disappearance and factory obliteration. I stand for manufacturing dominance. Kamala is on a regulatory jihad to shut down power plants all across America,” Trump said.
Trump also called for renewed investment in nuclear power, calling for advanced, small modular nuclear reactors online” to meet America’s energy demands. “Small nuclear, we call it,” Trump said, describing nuclear energy as “ultra-safe” and “ultra-clean.”
The Green New Deal folks keep telling us that we need to keep up with China in the fight against climate change. Then we had better go with Trump's plan to expand nuclear.
China has more nuclear reactors under construction than any other nation in the world and approved 10 new reactors in each of the last two years. The country is expected to surpass France and the US to be the world’s leading atomic power generator by 2030, according to Bloomberg.
So, oil is up on the peace hopes dashed and ahead of inventories that look tight.
Natural gas is trying to bottom, but the Wall Street Journal explains the natural gas market challenges.
The Journal writes, “A glut of natural gas is depressing prices and prompting fresh cutbacks in America’s drilling fields, despite one of the hottest summers on record."
Big producers such as EQT and Coterra Energy (NYSE:CTRA) are choking back on output, waiting to connect new wells to pipelines, and delaying drilling projects.
They aim to buoy prices that have rarely been lower during the heat of the summer when air conditioning creates a lot of power demand.
Benchmark natural gas futures ended Monday at $2.235 per million British thermal units, down 15% from a year ago and 29% less than the recent peak in mid-June.