Phil Flynn is writer of The Energy Report, a daily market commentary discussing oil, the Middle East, American government, economics, and their effects on the world's energies markets, as well as other commodity markets. Contact Mr. Flynn at (888) 264-5665
Gas Blame Game
There is nothing like rising gas prices that get politicians finger pointing in every direction. In politics, when gas prices go up, it is always the other party’s fault. They like to show that they feel your pain at the pump, so much so that they ask their limo drivers how it is impacting their family. Of course, it is kind of funny that when most politicians talk about the reasons for rising gasoline prices, one might wonder if they have ever seen a gas can in their life. In fact, I have kind of missed the political gasoline blame game in recent years because generally gasoline prices were low. Of course, politicians will try to take credit for that fact, but the reality is that prices were low because independent U.S. energy companies changed the world with the shale oil revolution. Even though many of those politicians fought U.S. energy companies every step of the way as prices went up they tried to take credit for them when prices went down. Yet, in the world of politics it is always the guy at the top who gets the blame or the credit, there should be a sign in the oval office that reads the gas price buck stops here. President Trump owns this rising gas price, and he should embrace it.
He should embrace it because the reason why gasoline prices are rising is a very robust economy with growth unlike anything we have seen in decades. Not only are we seeing record gasoline demand, that demand is reflecting a new surge in American economic optimism we have not seen in many years. We saw record gasoline demand in April and in yesterday’s Energy Information Administration’s supply report we saw demand come in at 9.689 million barrels a day.
That demand is in turn giving new life to the U.S. energy Industry that is emerging in making us a world power with economic influences, and less of a reliance on buying oil from countries that do not have our best interests at heart. Now we have an industry that is thriving and creating jobs in communities where just recently prospects were very limited.
Senate Democratic Leader Charles Schumer held a news conference to bash President Trump on rising gas prices. Of course, he has a history of opposing many of the things that have brought prices down. He has been opposed to drilling for many years in the US and was against the Obama deal with Iran. Now he is blaming the decision to withdraw from the deal as a factor in increasing gas prices. He also criticized the administration for planning to rollback fuel economy standards, not doing more to encourage the use of ethanol. “It’s time for this president to stand up to OPEC,” Schumer said of the Organization of the Petroleum Exporting Countries.
Yet, oil prices are under pressure, still reeling from that shocking 5.778-million-barrel increase in crude supply. This comes even as China is reportedly telling their refiners to buy more U.S. crude. Reuters reported that China will import record volumes of U.S. oil and is likely to ship more U.S. soy after Beijing signaled to state-run refiners and grains purchasers they should buy more to help ease tensions between the two top economies, trade sources said on Wednesday. Oil is also dropping on talk that OPEC might increase oil output to offset losses from Venezuelan and for the potential loss of Iranian oil output.
Still, oil traders are skeptical of the 5,778k barrel crude oil build when the other numbers make that number unlikely to be correct. We only saw a modest increase in 2,000 barrel increase in U.S. oil production. Cushing supply fell by 1.123 million barrels. In PADD 3 we saw crude increase by 3.181 million barrels. Gasoline supply rose by 1.883 million barrels. Distillates were down -951,000 barrels. Refinery utilization was robust +0.7 ppt vs est. +0.5 ppt and crude inputs -7k b/d Crude imports +558k b/d U.S. Fuel demand Rose 2.06% in Past Four Weeks U.S. Ethanol Stockpiles Rose 2.9% to 22.1 Mln Barrels.
Get real business news on the Fox Business Network! Call me for my daily trade levels and special updates. Follow me on twitter at #energyphilflynn. You can call 888-264-5665 or email me at firstname.lastname@example.orgQuestions? Ask Phil Flynn today at 312-264-4364