China reported that their March crude oil imports were at 49.66 million tons, up 21% year over year. They also saw natural gas imports jump in March to 8.73 million tons, up 26.1% ear over year. Iron ore March imports were at 102.11 million tons, up 18.9% year over year. Copper March Imports 552,317 tons, up 25% year over year. China’s soybean March imports were at 7.77 million tons, up 82% year over year, and meat imports at 1.02 million tons, up 11.4% year over year.
U.S. gasoline demand is showing signs of surging and oil traders should brace for a substantial crude oil draw in this week’s report. U.S. production, while creeping up, is still a far cry from its post-pandemic highs. That is leading to empty pipelines.
Reuters reports that, “By the fourth quarter, total utilization of the largest oil pipelines from the Permian is expected to drop to 57%, consultancy Wood Mackenzie said."
The nadir during the last market bust in 2016 was roughly 70%. U.S. crude output is currently about 11 million bpd and is not expected to grow much until 2022. But more pipelines were already set to come online, growing the gap between production and capacity covered by long-term contracts to a record over 1 million bpd in February, according to energy research firm East Daley Capital.
The drilling productivity report from the EIA and as reported by Reuters said that, “U.S. oil output from seven major shale formations is expected to rise for a third straight month, climbing by about 13,000 barrels per day (bpd) in May to 7.61 million bpd," the U.S. Energy Information Administration said on Monday. "The biggest increase is set to come from the Permian, the top-producing basin in the country, where output is expected to rise by 52,000 bpd to about 4.47 million bpd, the highest since April 2020," the EIA said in a monthly forecast.
Output from other top producing basins, such as, the Bakken and Eagle Ford are expected to slide by 12,000 bpd and 9,000 bpd, respectively. Production in the Bakken basin of North Dakota and Montana is expected to drop to 1.1 million bpd, the lowest since July 2020, according to the data.
Fact-checkers on President Joseph Biden’s energy policies are back tracking as the truth is that Biden’s energy policies have led and will lead to higher prices for gasoline and oil have become clear. Even some analysts that were interviewed by the fact-checkers have reversed their position as the increase and price and the impact on U.S. oil production and investment shifts are now obvious to almost everyone.
I was interviewed by fact-checkers from USA Today and laid out the facts why Joe Biden’s policies were raising oil and gasoline prices. I was not quoted in the ‘fact check” article and the article quoted other analysts without a sense that there was a dissenting voice with real facts to back up my case. That article led Facebook (NASDAQ:FB) and Twitter to protect Joe Biden by claiming comparisons of gas prices going up due to actions taken by Joe Biden lacked context and were untrue.
Biden’s recent attack on U.S. oil producers is now trying to tax them out of business by removing tax breaks that all companies get, except not oil and gas companies. Reuters reported that the tax hike for oil and gas is linked to the $2.3 trillion infrastructure package; it is part of a wider plan that includes boosting the corporate income tax rate from 21% to 28%.
A Treasury Department official estimated that eliminating subsidies for fossil fuel companies would boost government tax receipts by more than $35 billion in the coming decade. The “Made in America” tax plan did not specify which tax breaks for fossil fuel companies would be targeted. It said the subsidies undermine long-term energy independence and the fight against climate change and harm air and water quality in U.S. communities, especially communities of color.
One of the top fossil fuel breaks is called intangible drilling costs, which allows producers to deduct most costs from drilling new wells. The Joint Committee on Taxation, a nonpartisan congressional panel, has estimated that ditching it could generate $13 billion over 10 years according to Reuters. That may mean cash in the government’s hand, but the bill is paid by American consumers and businesses.
We said that a vote for Joe Biden was a vote for higher energy prices and already that has proven to be true. Fact-checkers need to re-check their facts. From what I have read, some of the oil analysts that they interviewed who said that Biden’s policies have not had an impact on higher oil and gas prices have already changed their minds and now are saying that they are raising prices. Now maybe they can stop blocking jokes comparing gas prices under Trump versus Joe Biden because not only are they true, they are also very funny.