Executive Out of Order

You're out of order! You're out of order! The executive order flurry is out of order. They're out of order, says Phil Flynn of the PRICE Futures Group.

Oil prices are strong as OPEC compliance to cuts improves and President Biden breaks records issuing executive orders for an incoming President that included issuing executive order pink slips to the energy sector. Not only are a slew of workers losing their jobs on the Keystone Pipeline project, but President Biden will also soon find out it is a lot easier to kill jobs than it is to create them. Industry experts say that President Biden's plan will kill millions of jobs. Jobs that will have to be replaced by what up until this point has been green empty promises.

Energy Czar John Kerry says energy workers that lost their jobs should get one building solar panels. That might be difficult because solar plants are mainly in China. The US has only 23.

While that might not be viable then perhaps you can get a minimum wage job because Joe Biden just upped the wage to $15 an hour.

While we continue to hear green energy companies for years promise us millions of jobs the reality is that they never happened and is as much as President Biden is spending on green energy. My guess is that he will fall way short of the jobs that he has promised. President Biden's programs will squeeze the middle class and poor and despite his increase in the minimum wage. US hourly earnings will fall. High-paying jobs will be lost, and in some parts of the country, small businesses who are not able to pay a $15 hourly wage will close, reducing job opportunity.

Oil prices are also getting a boost on reports that Saudi Arabia is making good on its promise to cut oil production, Word is that OPEC compliance is back over 103%. The Saudis have less fear of any criticism from their Biden Administration for raising oil prices. Why would President Biden complain? He wants less oil. He wants nets higher oil prices. So do the Saudis. Saudi Arabia is getting ready to offer a new IPO on another part of its state-owned oil company.

So, the Saudis want to raise prices to make money and they hope that the pool price will allow them to command a higher valuation when they sell this time. President Joe Biden will help them. Biden will also give oil speculators a boost as his policy will drive prices much higher overtime. While there is talk from the Biden Administration that they want to take away what they call generous subsides to oil and gas, the reality is he will be taking away millions of dollars of tax revenue from the Feds and the states. That will further add to the US debt. Eventually, it will lead our country into the Biden Recession.  

Biden's attack on energy is creating strange bedfellows. The farmers and the ranchers can be friends. Now, can the farmer and the oil industry be friends? Maybe.  Reuters reports “The US oil industry is seeking to forge an alliance with the nation’s corn growers and biofuel producers to lobby against the Biden Administration’s push for electric vehicles, but is so far meeting a cool reception, according to multiple sources familiar with the discussions. The effort to promote liquid fuels and combat expected federal subsidies for electric vehicles marks an unusual attempt by the petroleum industry to join with its long-time rivals, reflecting the scale of its concern over President Joe Biden’s measures to combat climate change and tamp down fossil fuels.  

While the oil industry and biofuels producers are competitors for space in America’s gas tanks, they share a desire to ensure a future for internal combustion engines. The effort also reflects the shifting political landscape in Washington. The oil industry’s influence has waned since Biden replaced Donald Trump as president, but the farm belt remains a powerful political constituency.

The American Fuel and Petrochemical Manufacturers (AFPM), an oil-refining trade group, confirmed it has been contacting state and national representatives of the corn and biofuel industries in recent weeks to seek support for a policy that would reduce the carbon intensity of transport fuels and block efforts to provide federal subsidies for electric vehicles.

The Biden bull energy market may be just beginning! Get prepared for higher prices. Get hedged! Be prepared. As oil and gas investment drops, supplies will be squeezed and oil and gas will eventually move higher.

Learn more about Phil Flynn by visiting Price Futures Group.