If you think the highest overall inflation rate in 40 years of 7% is bad, get ready for a real shock coming to a pump near you.
Oil prices are surging so much that, ironically, even the “Green New Deal” president is begging global and domestic producers alike to ramp up production and pump, pump, pump!
And despite his releasing millions of barrels of crude from the strategic oil reserve and pleading with oil-rich nations to increase their output, prices continue to climb.
In early December, oil was trading at $65 per barrel. Today, it’s over $90, which is more than a 50% increase in a little over a couple of months.
This past week, the average price of gasoline in the United States hit a seven-year high at the pump, but there’s still much more to come.
And while the U.S. Energy Information Administration these past few weeks predicted that prices will now decline continuously well into 2023, oil traders are pricing for $100 per barrel and higher in the next several months.
The go-to scapegoat for every problem the administration faces seems to be COVID, and it’s not at all different with this self-imposed oil crisis.
Yes, demand for petroleum did drop at the peak of the virus — and by peak, think a year ago, when weekly deaths were much higher but fewer people had COVID.
This brief pause in demand held oil prices down, but not for long and not enough to cause producers to shutter production. No, the reduction in domestic pumping has nothing to do with virology and everything to do with politics.
Imagine being the CEO of an oil company listening to the past year of antagonism from the Biden crowd — canceling the Keystone XL pipeline, suspending new drilling leases on federal land, and pledging to reduce U.S. carbon emission by 50% in the next seven years.
Would you commit millions — nay, billions of dollars to drilling and developing oil fields? Nope! And that’s why domestic production is down 1.2 million barrels per day over the past twelve months — not COVID.
Meanwhile, in the “for thee but not for me” world we live in, the administration hammers the domestic oil industry but begs OPEC nations to increase oil production.
And while OPEC+ has committed to a 400,000 BPD increase, fulfilling that commitment is problematic. Only the Saudis have that level of excess capacity, and currently, they aren’t particularly keen to help us out.
Russian oil infrastructure is decaying and can’t ramp up appreciatively, while political upheavals are interrupting production with big producers like Nigeria and Kazakhstan.
While the administration’s hapless energy secretary, Jennifer Granholm, laughed off a question in November about increasing U.S. production with a glib and erroneous response that OPEC and the global market set production, she now is imploring the domestic industry to “get your rig count up!”
Why the sudden turnaround? Simple. People vote with their pocketbooks. A recent CNBC/Change Research poll shows that two-thirds of all voters disapprove of the Biden administration’s efforts to “help their wallets.”
Personal finances are the biggest concern on people’s minds — far outpacing racial tensions, policing, and even COVID.
Gasoline is a large portion of a typical family’s budget, consuming as much as 20% in low-income households.
From the current high of about $4.50 a gallon in California to a low of $3.00 in Texas, everyone will soon be paying more at the pump.
West Coast folks will be spending well over $5.00 a gallon in the coming months — probably $6.00 — and even low-price Texas will see $4.00 per gallon or more.
This isn’t a guess or a prediction; it’s a solid forecast based on the prices of futures contracts in the oil market.
Yes, if Russia suddenly fixed its ancient infrastructure, Saudi Arabia cranked open the valves, and U.S. oil producers instantly were able and willing to crack open the fracking, prices would drop.
But we might as well believe in the tooth fairy while we’re at it.
Read more at American Thinker
Raise the price for fuel and raise the price of food in the Tranportation dept and reduce America to a 3rd World State Biden will soon by the most disliked American President in Americas over 240 Year History
A couple key points that are not mentioned. I think folks get too fixated with short term policy and don’t look at the “bigger picture.” Basically, this Administration shows NO SIGNS of any basic knowledge of the domestic energy system or the world commodity markets. This supply shortage got started back in 2014. Oil & gas prices “tanked” & then COVID put a further “damper” on any price recovery starting in 2020. A BUNCH of these larger development projects take YEARS to go from the drawing boards to initial production. You just don’t “get up your rig count.” You couple those market forces & operational realties with the OPENLY HOSTILE environment that has been created by our government, folks will not RISK capital investment, period. Less recognized & mostly behind the scenes, the push for “ESG” in financial circles is also putting downward pressure on investment. Allowing environmental “zealots” rather than professional businessmen to dictate policy in the investment community is a recipe for disaster. The voters need to WAKE UP. These progressive elements need to be SWEPT OUT beginning with this years mid-term elections. Otherwise, like the author says, this is not going to get any better any time soon…
Those in Washington making policy decisions are so far removed from the real world that they think they can wave their wands and everything will magically take place. EV cars, no more ICE vehicles as of right now. What could go wrong.
War on oil, block every attempt to renew pipes or to relieve constrants with new pipelines — that will save the planet, right? A little price hike is worth it all, they surmise. But they will be thrown out of office a few hundred years before there is any real impact from their disastrous policies on the weather.