You can still get gas for $2.19 a gallon in my town even after Iranian proxies attacked a major Saudi oil facility. But for how long? Within a day the average price for a barrel of oil shot up 20%, which sounds like a lot until you realize that only lifts it to $70.00 per barrel.
Brent crude futures, the international benchmark, rose as much as 19.5% to $71.95 per barrel, the biggest intraday jump since Jan. 14, 1991. By 1100 GMT, the contract was at $65.38, up $5.16, or 8.6%.
U.S. West Texas Intermediate (WTI) futures climbed as much as 15.5% to $63.34, the biggest intraday percentage gain since June 22, 1998. The contract was later at $59.36, up $4.51 or 8.22%
Not long after, despite Mr. Trump’s remarks about being locked and loaded (which shook the market a bit), the price stopped rising. It’s been slipping ever since. Brent Crude is now under $65.00 with WTI at $59.00.
First, we are again reminded of the problem with the Religion of Peace. The countries where it dominates are rarely at peace. Either internally or with each other. Relying on them for energy is a poor strategy. And wind and solar are not a replacement for what ails us in this regard.
Industry, transportation, the economy runs on
Dunkin’ Fossil Fuels. That’s not going to change.
Second, everyone is promising to tap their strategic reserves to offset the loss. The reports consistently suggest this facility provided 5 percent of the worlds oil refining. No one can be sure when it will be back online. While we’re waiting, why don’t we get back to being more energy independent?
They said it could never happen
Fracking has been the American miracle. Disproving two long-held- narratives. First, they said we’d never achieve energy independence. Second, we could not drill our way out. We can do both. Thanks to that something Liz Warren wants to ban her first day as President.
For the moment, and that may be a question of days or weeks, the Frackers are earning more per barrel for existing production. An incentive to increase production. But, so is everyone, including Russia, Venezuela, and Iran. Strategically speaking, it’s bad for the world when oppressive regimes have extra pocket-money. Long-range, the US should continue using this example as an incentive to increase the number of wells available and as justification for adding or upgrading refining capacity.
This brief crisis will be over before completion or, more likely, well have moved on to the next. But the current arrangements, thanks to fracking, have made what once would have been a serious long-term oil shock look less intimidation.
Drone or missile strikes just took out 5% of the global production capacity and the long-range price bet on oil is $68.00 per barrel. That’s kind of amazing. But what’s interesting is it could be better. But only if we keep Democrats out of office.
They are all enemies of abundant affordable energy which is essential to a healthy and growing economy.