This week, we released our latest podcast with Irina Slav, an energy writer who lives in Bulgaria and writes for oilprice.com and her own substack. I fully believe that Substack will replace MSM written media in the coming years. I encourage your to find authors and subscribe and get on board.
I include our 13 minute segment for your “Hot Take over Your Commute,” where we talk about the strategy of Russia pricing oil and natural gas in rubles, as well as the wests lingering bad feelings towards Russia that are a hangover from the Cold War. As the War enters its 6th week, it would appear that the rumors of the imminent demise of the Russian machine is been greatly exaggerated.
Here is Irina’s most recent piece on OPEC dumping the IEA as a data source and the impact of war on Russia and Saudi Arabia’s relationship.
Propaganda much? When John Kerry said that “we risk losing sight of the climate goals with the war in Ukraine…” I thought to myself “Wow, how can he be so clueless?”
Well, cluelessness isn’t limited to American politicians. Here’s a 1 minute clip of Zelenskyy talking about the need to move to the green energy plan as soon as possible. This at a time when a) European power prices are so high the economy is failing and plants are shutting down because they can’t afford the electricity inputs and b) copper, nickel, cobalt, neodymium and a huge host of other minerals come directly from Unfriendly countries, too.
Even the smallest bit of intellectual curiosity should have politicians asking “what else do we get from Russia?”
Yesterday, the Biden administration announced plans to release 180 mmbbls of oil from the strategic petroleum reserve (SPR) at a rate of 1 mmbo/d for 180 days. This represents approximately 25% of the total SPR capacity of 714 mmbo.
The clear goal is to lower gasoline prices for consumers, which is ironic given their energy policies, proposals of windfall profits taxes, carbon taxes and SEC governance are all doing precisely the opposite of that as capital and talent is driven from the sector.
To make matters more laughable, the administration continues to cajole oil and gas producers to ramp up production, thinking it’s just the flip of a switch when in fact the environment is one where labor, steel, frac sand and inflation are substantially negatively impacting the ability to do more anytime this year. And with no action too ridiculous or intellectually inconsistency, the administration has proposed to reduce oil and gas depreciation in the proposed Federal budget and according to Bloomberg:
The White House will call on Congress to “make companies pay fees on wells from their leases that they haven’t used in years and on acres of public lands that they are hoarding without producing,” the administration said in a statement on Thursday. “Companies that are producing from their leased acres and existing wells will not face higher fees.
Supply-demand signals in the market move price to stimulate or curtain one, or both. The constant drum of “do something, do more!” from Washington continues to message to E&Ps to continue to shrug until “they get it.”
No doubt, 180 mmbo is a huge volume of oil to release and traders will figure out a way to make millions of dollars in profit from it at the expense of taxpayers. Regardless of whether or not it turns out to be a good short term move for the consumer, the mixed messages and ignorance of the dual facts that carbon taxes and the energy transition plan will raise gasoline prices substantially above where they are today shows just how little this administration understands about the impact of their own policies.
I’ve written about Tesla a number of times. I think the cars are great and the business is awful. Here’s a great article from a fund manager as to why he’s short Tesla.
And finally, Glenn Greenwald has a nice piece on media bias as favored democratic politicians are “innocent until proven guilty” and their Republican peers are “smeared with guilt, regardless of their innocence.”
Weekend Reading