Incredible. That’s where we are, incredible to fill our car. President Joe Biden proclaims that when it’s over, it will be good for me. Never before has someone been more un-credible, in every way, and forevermore, that’s how he will stay. That’s why. My friends that it’s incredible, that someone, so forgettable thinks that we are so gullible, too.
Biden said it. The gas prices are rising from only what Biden thinks is his incredible transition. Incredible! He said, ‘“When it comes to the gas prices, we’re going through an incredible transition that is taking place that, God willing when it’s over we’ll be stronger. “The world will be stronger and less reliant on fossil fuels when this is over.”
He offered no timeline as to when it will be over. Perhaps our great-grandchildren or our great-great-grandchildren will see the benefits of all of this so-called energy transition but for now, it has only brought the world economic hardship and global unrest. The energy transition in Europe has destabilized the continent and has led to war, raising not only the possibility of energy shortages but food shortages as well. We could see people actually starve as a direct result of the so-called “incredible” transition.
In fact even as war rages, the EU is still struggling to find a way to ban Russian oil. The EU says that a ban is coming but Hungary is still a major holdout. EU’s said that, “We are working to build an agreement on a Russian oil embargo but Hungary’s Foreign Min. Szijjártó said that Hungary will not support the EU’s proposal for an oil embargo until there is a solution offered first. Germany plans on having around two dozen mostly coal-fired power plants, which were scheduled to close due to the “incredible transition” to keep the lights on if Russia decides to cut them off.
The “incredible transition” is also helping U.S. drivers pay a record high price for gasoline yet again. AAA says that, “Regular unleaded hits $4.599 a gallon. While we expect that gas prices should peak on Memorial Day, we should not fall back too far as U.S. oil data is still wild bullish, and disturbing.
The American Petroleum Institute (API) reported that crude supply increased by 567,000 barrels but gasoline supply tanked by 4.223 million barrels. Distillates fell by 949,000 barrels. Refineries have a job to do. The margins are great but they have a very difficult time meeting demand. It makes you wonder why we closed down all these refineries. Oh yeah, I remember. It’s all about the incredible transition.
Part of the Incredible Energy Transition by the Biden administration was to hamper U.S. oil producers and lift sanctions on Iran. Yet it appears that Iran was cheating all the time on the old agreement.
The Wall Street Journal reports that, “Iran secured access to secret UN atomic agency reports almost two decades ago and circulated the documents among top officials who prepared cover stories and falsified a record to conceal suspected past work on nuclear weapons, according to Middle East intelligence officials and documents reviewed by The Wall Street Journal.
The International Atomic Energy Agency documents and accompanying Persian-language Iranian records reveal some of the tactics Tehran used with the agency, which is tasked with monitoring compliance with nuclear nonproliferation treaties and the later 2015 nuclear deal. The U.S. and the IAEA have said for years that Iran has failed to answer questions about its past nuclear work in a cat-and-mouse game that continues to this day and now complicates a revival of the nuclear deal, which lifted most international sanctions on Iran in exchange for limits on Iran’s nuclear activities. Middle East intelligence officials said the IAEA document, was marked confidential by the agency, and Iranian records were circulated between 2004 and 2006 among senior Iranian military, government, and nuclear-program officials. The agency was investigating information that suggested Iran had worked on nuclear weapons.
Iran’s acquisition of sensitive IAEA documents “represents a serious breach of IAEA internal security,” said David Albright, president of the Institute for Science and International Security and a former U.N. weapons inspector. “Iran could design answers that admit to what the IAEA already knows, give away information that it will likely discover on its own, and at the same time better hide what the IAEA does not yet know that Iran wants to keep that way.” Stay tuned.
It is being reported that due to the incredible transition, UK energy bills could surge by another 42% in October. Prices that are already up over 100% from a year ago. It has been widely reported that the UK reliance on wind and solar has left them vulnerable to this major price spike.
Energy Secretary Jennifer Granholm caused a momentary sell-off in the market when she suggested that the possibility of an oil product export ban was still on the table as a tool to reduce prices, though most people aren’t taking that risk seriously, at least not yet. Yet who knows because the Biden administration is desperate and they continue to try to put band-aids and the larger energy problems.
We believe there’s still a significant risk of an upside pop in oil, gasoline and diesel assuming that the Energy Information Administration (EIA) confirms the type of numbers that we saw from the American Petroleum Institute. Even talk of a congressional delegation meeting with Saudi Crown Prince bin Salman it’s providing little comfort to the market because there are not a lot of people that believe that the Saudis can add a lot of oil to the market right now. Even if they could add oil, the problem is refining capacity which we are short of. Still you have to respect the three day holiday weekend. Generally in this type of scenario we have the potential to rally over the next couple of days but see a sharp correction right after the holiday. Traders need to be on guard and hedgers that are not, should look for that break to lock in hedges for the rest of the summer. We have a very tight market going forward and unless we see a significant drop in demand, we are going to continue to be pushing toward record highs for prices across the board.
Natural gas keeps running as fear that our storage deficit will keep widening. S&P Global (NYSE:SPGI) Platts reports that their survey predicts 87 Bcf build in the week ended May 20 Storage deficit would widen further to 320 Bcf. US natural gas in storage is likely expanded at a below-average pace in the final week of May as blistering heat across Texas and the Mid-continent limited injections to inventory, lending further support to the rally in NYMEX gas futures. The expected build of 87 Bcf would be the sixth undersized injection reported in 2022, which comes as unseasonably hot temperatures boost gas-fired cooling demand in Texas, the Midcontinent, and the Western US, following unusually cool weather last month in the Midwest and the Northeast. An 87 Bcf build would come in well below the 2021 corresponding-week injection of 109 Bcf and fall short of the five-year average injection of 97 Bcf. Assuming the survey prediction is correct, US storage levels would climb to 1.819 Tcf, expanding the deficit to the five-year average to its widest yet this year at 320 Bcf while widening the shortfall to 2021 corresponding-week storage levels to 380 Bcf.