Joe Biden touted a global release from the International Energy Agency’s Strategic Petroleum Reserve in his State of the Union speech but failed to mention that the price of oil soared anyway, says Phil Flynn of the PRICE Futures Group.
It is because the amount of the release is less than one day of total global oil demand and only three days of US demand. That should make you feel good, because 30 million of the 60 million barrels released will come from the caverns of the United States and be paid for by the American taxpayer. The release was also at the lower end of market expectations so it had little impact on the market, especially as OPEC will announce today that they have no plans to stray from their predetermined pace of modest production increases, adding just 400,000 barrels a day to their quota.
That may not really matter because OPEC is not meeting its quota anyway; and its favorite co-conspirator, Russia, is busy killing civilians in a sovereign nation. Joe Biden has a knack for seeing his abject failures as accomplishments. His total mismanagement of the US SPR crude oil has not cooled prices but has played a hand in increasing them, along with all his energy policies that have helped fuel the crisis in Europe as well as add to inflation at home.
The real point is the fact that no US President has mismanaged the Strategic Petroleum Reserve crude oil worse than Joe Biden. In fact, no President has totally had a more failed energy policy that has helped bring the world to the brink of a new world war than Biden. In November, he tried a release from global oil reserves in an attempt to send OPEC and Russia a message and try to get them to increase production. He failed and also failed to bring down prices. After the release of the oil back in November, prices went up after it succumbed to the Omicron virus announcement. Now, after Biden touted the additional release, prices have gone even higher.
We also get the EIA report and if it is like the API, it will be another bullish catalyst. API reported a huge 6.1-million-barrel draw along with a one-million-barrel draw. The gas supply is 2.5 million and distillates 400k. I believe if the Energy Information Administration report is similar, then guess what, we’re going to see another reason to rally.
There we go.
There is no doubt that the energy crisis is here. Over a year ago, I did a webinar on the coming energy crisis and sadly it is coming to fruition. We have been warning people, even when oil prices went below zero, that at some point it would cause oil to soar even more. I said the long-term outlook for oil was very bullish because of the underinvestment that we had seen with the dip below zero.
It made things only worse, but really what was the icing on the cake was the Biden administration and their anti-fossil fuels policies. I said a vote for Joe Biden was a vote for higher energy prices. Biden’s policies are the main reason we are in the situation we are in today. Europe made a lot of mistakes as well, becoming dependent on wind and solar, but mainly becoming more dependent on Russian natural gas. It’s time to get back to energy reality to save the economy and save the world from even more destruction.
Learn more about Phil Flynn by visiting Price Futures Group.