The climate do-gooders from the so-called Group of Seven rich nations, decided to put more burden on the poor by pledging a quicker phase out for fossil fuels, states Phil Flynn of PRICE Futures Group.
After a two-day meeting in Sapporo under Japan’s 2023 Presidency of the G7, Climate, Energy and Environment Ministers, issued a communiqué setting out aims to strengthen energy security and accelerate progress on clean energy transitions. This quest to set new targets for efficient wind and solar will sharply increase the cost of energy making it a luxury that only the rich can afford.
Reuters reported that the G-7 agreed to speed up renewable energy development and move toward a quicker phase-out of fossil fuels, but they stopped short of endorsing a 2030 deadline for phasing out coal that Canada and other members had pushed for and left the door open for continued investment in gas, saying that sector could help address potential energy shortfalls. The G-7 said that “In the midst of an unprecedented energy crisis, it’s important to come up with measures to tackle climate change and promote energy security at the same time,” Japanese industry minister Yasutoshi Nishimura told a news conference. “While acknowledging that there are diverse pathways to achieve carbon neutral, we agreed on the importance of aiming for a common goal toward 2050,” he said. In their communique, the members pledged to collectively increase offshore wind capacity by 150 gigawatts by 2030 and solar capacity to more than 1 terawatt. Yet the G-7 has failed because despite their efforts to replace fossil fuels, they have really done more damaged to the environment as fossil fuel demand is on track to break records this year.
In the US, failed energy policy by the Biden administration is causing yet another spike in gasoline prices. AAA reports that the national average of regular gas surged to $3.673 a gallon. That is up 6.9 cents from a week ago and up 21.6 cents from last month. Now some of that is the summer blend switchover but the trend for gasoline is still higher than it should be.
The Biden administration is running out of options to cover up for their disjointed and failed energy policies. Their failed diplomacy, starting with its encouragement of the war in Ukraine, and its buffoonish handling of relations with Saudi Arabia, is already hitting the poor in the US because of the OPEC production cut and refinery closures in the US. Biden’s anti-fossil fuel agenda and attacks on the US oil and gas industry and their workers is causing great harm.
Biden's foreign policy of trying to make our long-term ally Saudi Arabia a pariah state has pushed the country closer to our adversaries. Now reports over the weekend that Saudi Arabia is going to recognize Hamas, after renewing relations with Iran, raises the threat of all-out war in the Middle East.
The Wall Street Journal reported that, “Senior Saudi officials were planning to meet with leaders of the Palestinian militant and political group Hamas on Sunday to discuss renewing diplomatic ties, which have been cool since 2007, part of a diplomacy spree led by Crown Prince Mohammad Bin Salman that has seen Riyadh move closer to Iran. Re-establishing ties between Iran-backed Hamas, which is a US-designated terrorist group, and the Saudi kingdom would mark a setback for efforts by the US and Israel to establish a military alliance between Israel and other Sunni-majority countries against Iran and its allies. They also complicate Israeli Prime Minister Benjamin Netanyahu’s goal of normalizing relations with Riyadh, with opposition to Iran as their primary shared interest.”
Yet the Biden team is talking up their relations with the kingdom. Reuters reported Friday that, “Senior aides to US President Joe Biden on Friday hailed progress toward resolving conflict in Yemen after “constructive” talks in Saudi Arabia with Crown Prince Mohammed Bin Salman. The meetings included Biden’s top Middle East adviser, Brett McGurk, and his Yemen envoy, Tim Lenderking, and took place on Thursday and Friday, said Adrienne Watson, a spokesperson for the White House National Security Council.” I guess that pariah state thing is not working out too well.
Oil demand in India is on a tear. Reuters is reporting, “Indian state refiners posted an 8.4% rise in sales of gasoil to 3.45 million tonnes in the first half of April compared with the same period last month, preliminary sales data showed, indicating higher demand from the agriculture sector and a recovery in industrial activity.”
Oil prices are off to a mixed start, but upward momentum should start to build. Crude supply in the US could plunge this week by 4 million barrels and gasoline supply should fall by 2.5 million barrels and distillate down by 2 million barrels. Refinery runs will perk up by 1.0 percent.
The US oil production outlook is signaling stagnation. Reuters reported that, “US oil rig count fell by -2 over the seven days ending on April 14 and is down by a total of -39 (-6%) from its peak in early December as exploration and production firms have trimmed activity in response to lower prices. The number of active rigs has fallen to the lowest level for ten months since June 2022.
Do we finally have a bottom in natural gas? Weird weather of hot then cold is keeping the natural gas market off balance, but it might be time to start looking at the July contracts.
Learn more about Phil Flynn by visiting Price Futures Group.