Oil prices got hit in a risk-off mode as the Fed suggests that tapering of the asset could happen this year and continuing concerns of Covid spread, not to mention a total lack of confidence in the leader of the free world, says Phil Flynn of the PRICE Futures Group.

At the same time, the Biden administration's total failure in Afghanistan has many people wondering whether Biden is fit to lead the country. He left Americans behind to the mercy of the Taliban and has created a haven for terrorists who want to make the chant “death to America” a reality. The total surrender of Afghanistan to the Taliban was either just total incompetence or it was a total betrayal of our country and citizens. Whatever it was, Biden is not fit to lead the country. It is time congress launch an investigation and ask the questions the press should have asked during the election as to whether Joe Biden has the capacity to lead the United States of America.

The Washington Examiner reported that Joe Biden’s decision to withdraw forces from Afghanistan over the objections of other NATO allies has enraged officials in the United Kingdom, stoking distrust and contempt for American foreign policy leadership. “Now this is a harsh lesson for all of us,” senior British lawmaker Tom Tugendhat, who is chairman of the Foreign Affairs Committee in the House of Commons, told Parliament. “We can set out a vision, clearly articulate it, for reinvigorating our European NATO partners to make sure that we are not dependent on a single ally, on the decision of a single leader, but that we can work together with Japan and Australia, with France and Germany, with partners large and small, and make sure that we hold the line together.” 

Those sentiments could reinforce France’s desire for “strategic autonomy” from the United States. French and British foreign policy cooperation has been impeded by acrimonious disputes over the UK’s exit from the European Union, but those controversies seem to pale now in comparison to Tugendhat’s self-described “anger, grief, and rage” over Biden’s decision and his barely restrained contempt for the American president’s justification for the chaotic exit according to The Examiner.

Oil also has been weak. Demand concerns over Covid flare ups is overshadowing solid demand numbers in the US, even though there are signs of the summer driving season being past its peak. The four-week total products supplied over the last four-week period was an impressive 20.8 million barrels a day, up by 13.2% from the same period last year. That is a pre-Covid-like demand number. Over the past four weeks, motor gasoline product supplied averaged 9.5 million barrels a day, up by 8.4% from the same period last year. Distillate fuel product supplied averaged 4.0 million barrels a day over the past four weeks, up by 10.9% from the same period last year. US oil production also ticked up. 11.4 million but is still a far cry from where we were pre-Covid.

Yet if Covid was not enough to sink us, the Fed news was. The Fed put the tamper back in taper in the Fed Minutes. MarketWatch reported that, "Most of the 19 top Federal Reserve officials said last month that they thought it would be appropriate to start reducing the pace of its asset purchases this year, according to minutes of their policy meeting released on Wednesday. These officials said they thought the Fed’s benchmark of “substantial further progress” criterion had been met in terms of inflation and was “close to being satisfied” in terms of the employment goals. The Fed is buying $120 billion per month of Treasuries and mortgage-backed securities each month to put downward pressure on long-term interest rates. The minutes show that there were sharp divisions on the tapering questions. It wasn’t clear whether the Fed would be prepared to announce at tapering at the next meeting in September."

Learn more about Phil Flynn by visiting Price Futures Group.