Oil prices are on the defensive as a huge miss on the Friday jobs report is raising more questions about the direction the country is headed under Joe Biden. The government on Friday said the economy created 235,000 new jobs last month, just one-third of Wall Street’s forecast and the smallest gain since January. Biden blamed the coronavirus delta variant, yet it’s clear that more Americans question his leadership on all issues including energy and economic policy.
Even Biden’s supporters acknowledge that he has had a terrible month. The failure and disgrace of the tragically botched withdrawal from Afghanistan and falling confidence in the administration’s ability to get ahead of the coronavirus have plummeted his poll numbers. He fails to take any responsibility for anything, always looking to point the finger of blame on the past administration or the coronavirus that he promised to vanquish.
Now there are real concerns that his economic policy of massive government spending could derail the economy as a whole. Biden’s energy policy is also headed towards failure as it is based on pie in the sky ideals as opposed to reality. There is a real disappointment that the Biden administration continues to call on OPEC to raise oil production while at the same time discouraging oil production at home.
This comes at a time when the USA energy industry is trying to battle back from Hurricane Ida that is proving to be a bigger challenge than many people believed in the days after the storm. The Bureau of Safety and Environmental Enforcement (BSEE) reported that 83.87% Gulf oil and 80.78% gas is still offline.
We also saw the U.S. rig-count plummet, falling as the overall U.S. rig count fell 11 units to 497 for the week ended Friday (Sept. 3), according to the latest figures published by Baker Hughes Co. (BKR). Net changes in the United States included a 16-rig decrease in oil-directed drilling.
The storm means product supply for gasoline, diesel and jet fuel could fall pretty dramatically. The Louisiana Offshore Oil Platform – the LOOP – is still shut down and because of that, the oil numbers will be messed up for the next couple of weeks. Ultimately this is going to be very bullish for oil and products.
Natural gas prices pulled back after hitting a new high. Global natural gas prices are on fire as global demand is exceeding supply. Hurricane Ida is slowing U.S. exports to the world and it is causing places like China to switch from liquefied natural gas to more jersey burning fuels to meet demand. Natural gas is the bridge fuel that we need to reduce our carbon emissions but still meet the demands of electricity around the globe. Record-breaking natural gas prices in Europe may be a preview of what we could see this winter here in the United States.
On a very sad note, my good friend and natural gas legend, founder, and CEO of EBW Analytics, Andy Weissman, passed away over the weekend. Andy was not only a great analyst but a really great human being. I learned a lot from him and he will be missed. Keep him in your prayers.