By Melvin Blackman QUARTZ Last week? We were talking about market manipulation at the business level and also the state level. The industry intended to cut production so as to maintain prices if California capped prices. California was putting a new program in place to regulate pricing. An AZ state rep was going to California to ask them not to pass the bill. All are forms of market manipulation and one oil industry person did not like what I was saying. This week, we have Joe Biden planning to put some extra gasoline out on the market to keep pricing level or even lower it. Gross government economic manipulation. Typically, this does not work as well as it goes overboard or has limited results. Joe is hoping to keep prices low for Memorial
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by Melvin Blackman
QUARTZ
Last week? We were talking about market manipulation at the business level and also the state level. The industry intended to cut production so as to maintain prices if California capped prices. California was putting a new program in place to regulate pricing. An AZ state rep was going to California to ask them not to pass the bill. All are forms of market manipulation and one oil industry person did not like what I was saying.
This week, we have Joe Biden planning to put some extra gasoline out on the market to keep pricing level or even lower it. Gross government economic manipulation. Typically, this does not work as well as it goes overboard or has limited results. Joe is hoping to keep prices low for Memorial Day and the Fourth of July. We will see if this works. Also, and according to QUARTZ the fracking industry is putting as much oil into the market place as possible. Still needs to be refined. Refineries always seem to run close to capacity or go down for house cleaning at critical times. RJS can probably give us an update on refinery capacity and scheduling.
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The U.S. government is draining 42 million gallons of gasoline from its reserves, QUARTZ, Melvin Blackman.
The United States government is about to begin selling off a bunch of gasoline. Announced Tuesday, about 1 million barrels. The equivalent of 42 million gallons of gasoline will be for sale from the Northeast Gasoline Supply Reserve (NGSR). The reason why? Summer road trips.
WASHINGTON, D.C.— Today, the U.S. Department of Energy’s (DOE) Office of Petroleum Reserves announced a solicitation for the sale and liquidation of 1 million barrels (42 million gallons) of gasoline in the Northeast Gasoline Supply Reserve (NGSR). This solicitation is strategically timed and structured to maximize its impact on gasoline prices, helping to lower prices at the pump as Americans hit the road this summer.
U.S. Department of Energy Announces Sale of Northeast Gasoline Supply Reserve as Americans Hit the Road for Summer Driving Season | Department of Energy
In a statement, U.S. Secretary of Energy Jennifer M. Granholm: “The Biden-Harris administration is laser focusing on lowering prices at the pump for American families, especially as drivers hit the road for summer driving season. By strategically releasing this reserve in between Memorial Day and July 4th, we are ensuring sufficient supply flows to the tri-state and northeast at a time hardworking Americans need it the most.”
The NGSR is like the crude oil-focused Strategic Petroleum Reserve, but for gasoline. “A one-million-barrel emergency reserve would give Northeast consumers supplemental supplies for a few days in the event of a hurricane or other disruption, until existing distribution infrastructure could return to full operation,” says the NGSR page on the Department of Energy’s website. While it’s normally saved for emergencies, this time the reserves are being tapped to tamp down gas prices ahead of the summer driving season.
Meanwhile, the US is taking on the Saudis. “The United States is drowning OPEC in oil,” QUARTZ.
Shale country keeps putting pressure on the Saudi-led cartel.
Pump, pump, pump pump it up! is what American oil producers have been saying for five years straight, since a prodigious increase in crude oil production in shale country helped make the US the largest crude pumper in the world.
Traditional oil power OPEC, a cartel led by Saudi Arabia, has been cutting supply to prop up prices that began falling in mid-2022, with Saudi Arabia alone extracting nearly a million fewer barrels per day by the time 2023 was over. Does the US care? Nope!
“US oil supply growth continues to defy expectations,” the International Energy Agency said in its latest Oil Market Report, released Thursday (Jan. 18). The US is producing more oil than any country in history, some 13 million barrels of it per day, and all those barrels are coming at OPEC’s expense. Combined with record production in Brazil and Guyana (whose oil resources are the key to an escalating diplomatic row with Venezuela), as well as the defection of OPEC member Algeria, the global oil supply market share of OPEC+ (OPEC and a select group of allies) sits at about 48%, the lowest since the “plus” was added in 2016.
Those non-OPEC countries don’t seem keen to slow down in 2024, but if OPEC wants to fight to regain its market share? Itcould only make the prices fall further.
“While OPEC+ supply management policies may tip the oil market into a small deficit at the start of the year, strong growth from non-OPEC+ producers could lead to a substantial surplus if the OPEC+ group’s extra voluntary cuts are unwound,” the IEA report said.