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
Biden’s epic failure in the fall of Afghanistan is raising anger, distrust and sadness across the world. The president tried to blame everybody else but at the end of the day, this was his decision and plan. It was an ill-advised decision with a bad plan and was an insult to our military that spent years of sweat, blood and toil to stabilize Afghanistan which it had done. He failed to be honest with the American people in his speech yesterday pointing fingers at the Trump administration, blaming the president of Afghanistan, blaming the Afghanistan military. Yet he failed to tell you that military advisors were warning that this was going to happen. The president did say that he was caught by surprise by how quickly Afghanistan fell but he should not have been. He seemed almost indifferent to the deaths and the human suffering that his decision caused not only today but will in the future.
The president mischaracterized the war in Afghanistan in a pathetic attempt to cover for his incompetent decision that will have far-reaching geopolitical consequences. The press has failed to call out this president at all during the election and after and has failed to take him to task for years of bad decisions. They are complicit in putting this president in a position to make more bad decisions that in this case could increase the risk of terrorist attacks on our homeland.
Fox News reports that, “The New York Times, The Washington Post, and The Wall Street Journal issued a joint statement urging President Biden to ensure the safe exit of their journalists from Afghanistan.
“For the past twenty years, brave Afghan colleagues have worked tirelessly to help The New York Times, The Washington Post and The Wall Street Journal share news and information from the region with the global public,” the joint statement began. “Now, those colleagues and their families are trapped in Kabul, their lives in peril.” “As employers, we are looking for support for our colleagues and as journalists, we’re looking for an unequivocal signal that the government will stand behind the free press. In that light, we ask the American government to move urgently and take three concrete steps to protect their safety,” the statement continued.
The Wall Street Journal reported that Former President George W. Bush urged the Biden administration to expedite the evacuation of vulnerable Afghan people, saying “we have the responsibility and the resources to secure safe passage for them now, without bureaucratic delay. “Our hearts are heavy for both the Afghan people who have suffered so much and for the Americans and NATO allies who have sacrificed so much,” Mr. Bush wrote in a statement along with his wife, Laura. Addressing service members and veterans, the statement read in part: “You took out a brutal enemy and denied Al Qaeda a haven while building schools, sending supplies, and providing medical care. You kept America safe from further terror attacks, provided two decades of security and opportunity for millions, and made America proud. We thank you from the bottom of our hearts and will always honor your contributions.”
Russia, Iran, and China are now embracing the Taliban regime to use the country for their agenda of global domination. The Taliban that has refused to denounce Al-Qaeda will once again allow Afghanistan to be a harbor for terrorists. The press, in many cases, spews lies to fit their political agenda. Truth is in short supply so why can’t the president of the United States mischaracterize the situation in Afghanistan calling it an endless war, overestimating the risk to the U.S. soldiers. Yet can you lie about leaving the Afghanistan people out to dry and put all of our helpers in the Afghanistan war over the last 20 years at risk of reprisals by the brutal Taliban regime, because many in the press do not call you out? Yet the Wall Street Journal did. The Journal said, “the president was dishonest in framing the U.S. mission merely as fighting in another country’s “civil war.” The U.S. didn’t remain in Afghanistan for 20 years to send women to school or to “nation-build.” The core mission was to prevent the country from again becoming a terrorist safe haven. The Taliban’s victory will now attract thousands of young jihadists from around the world, and they will have Americans and the U.S. homeland in their sights.
Mr. Biden said he would maintain a “counterterrorism over-the-horizon capability” to strike camps in Afghanistan, but that will be much harder from the distance of the Persian Gulf. This is a far bigger risk than he lets on, as U.S. intelligence agencies know.
Biden was also dishonest in framing his Afghan decision as a false choice between total withdrawal and sending tens of thousands of troops again. He knows his own advisers, military and civilian, believed they could support the Afghan military with no more than a few thousand troops to supply air power and intelligence.
He also knows the U.S. hasn’t had a single casualty in more than a year in Afghanistan. Even if Biden was set on withdrawal, he could have done it based on conditions that would have given the Taliban more incentive to negotiate with the government. Mr. Biden claimed that Afghan leaders Ashraf Ghani and Abdullah Abdullah had refused his advice to negotiate with the Taliban. That is false. They had been negotiating with the Taliban for months, under enormous pressure from the Trump Administration. The problem is that the Taliban had no incentive to negotiate in good faith knowing the U.S. was leaving and would be able to take its chances on a military victory.”
Crude oil prices are still fighting off covid fears. China had some weak economic data yet reports that China drew on crude oil inventories in July, marking the fourth consecutive month it has processed crude than what was available from domestic output and imports, should give the market some underlying support.
Reuters is reporting that U.S. shale oil output is expected to rise to 8.1 million barrels per day (bpd) in September, the highest since May 2020, according to the Energy Information Administration’s monthly drilling productivity report on Monday. The forecast is led by growth in the largest formation, the Permian Basin, where crude output is estimated to rise 49,000 bpd in the month, offsetting falling output expected from the Bakken and other top regions. Production in the Permian is expected to reach 4.8 million bpd in September, the highest since March 2020.
Yeah well, we’re seeing the shale come back but it’s a far cry up to where it could have been if it weren’t for the Biden administration’s restrictions on shale. That is one of the reasons why the Biden administration has been begging OPEC to please raise oil production. It was a slap to U.S. energy producers and it was a slap to our Canadian allies.
Despite the weak action, we really are in a consolidation period and we’re probably headed towards higher prices in the next couple of months. The consolidation period is being caused by concerns about covid and demand weakness in China but if China starts to bounce back we’re still going to be under supplied. The market yesterday of rallied back off the lows after OPEC said it sees no need to answer the call by the Biden administration to raise production and that means we’re not going to see any more oil than was expected out of the OPEC plus cartel. That should keep the market relatively tight and avoid a major collapse in prices. It also shows that the OPEC plus cartel is going to be very attuned to any demand destruction caused by the rising covid.
Natural gas prices are back on fire as strong export demand, tropical storm threats and low U.S. inventories are giving the bulls an upper hand in this market. This is probably a very good time to start looking at options for this winter. We really expect some upside risk this winter. If you need to be hedged on natural gas prices, the time is now. Please get hedge and do not take the risk if we get colder than normal winter which BamWX weather is predicting. We then could see some significant price spikes in the price of natural gas.
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Make sure that you call to get the Phil Flynn Daily Trade Levels as well as a evaluation of your futures trading account. Call me at 888-264-5665 or email me a Pflynn@pricegroup.com.Questions? Ask Phil Flynn today at 312-264-4364