Carbon taxes and carbon trading have proven to be a hard sell for an increasingly wary public, but with the Paris Agreement of 2015 the world saw the biggest step yet toward this technocratic future of energy control and carbon rationing.
Do you think there might be some similar shenanigans going on with this petrodollar "alternative?" If so, then might I just say you are an extremely jaded and skeptical person. You are also correct, so give yourself a cookie.
...now that we are living in an era where India and China are being positioned as "rivals" of the American hegemon, it certainly makes sense that we will see the key tenets of Pax Americana challenged.
...in many ways, this IPO is a moment of truth for the Saudis generally.
Last March, in 2020 “they” decided that in a year, they would end the “SLR” program. What’s that you ask? Policy manipulation that gave banks more latitude on what they could hold, reserve requirements, etc.
We just passed Biden’s first 100 days. How are things going? Well his first move was to cancel the keystone pipeline and ruin the lives of thousands of people who made their living working it. Within weeks, energy costs spiked.
Ocean shipping rates have been soaring. The cost to get oil to our refineries has gone up for months. So, frankly this little charade has very little chance of keeping a lid on oil prices. It’s probably going higher, unless of course they play the “lets shut the country down game” again.
Prices at the gas pump are soaring toward an all-time high, but drivers appear to be saying, oh well—for now anyway.
Tightening by the mightily bloated Federal Reserve is off and running.
The Fed’s Open Market Committee kept its word the other day, with the first of what’s expected to be 6 or 7 quarter-of-a-percentage point interest rate increases by the end of the year to put inflation in its place.
Today, Fed Governor Christopher Waller warned that the Fed may need to enact one or more 50 basis point hikes in 2021.
Though he voted this week for just 25 basis point because of economic uncertainty over Russia’s invasion of Ukraine, Waller said he thinks the Fed may need to be more aggressive soon.
“I really favor front-loading our rate hikes, that we need to do more withdrawal of accommodation now if we want to have an impact on inflation later this year and next year.”
“The way to front-load it is to pull some rate hikes forward, which would imply 50 basis points at one or multiple meetings in the near future.”
In addition to the rate hikes, Waller said he thinks the Fed needs to start reducing its holdings of Treasuries and mortgage-backed securities sooner than later.
Americans’ credit cards got a sweaty workout in February, as monthly consumer debt rose the highest in over a decade.
Matt Phillips believes it could mean that climbing inflation coupled with households’ diminished savings are forcing more people to use plastic.
The Fed's monthly consumer credit report for February came out yesterday, showing that consumer debt — excluding mortgage debt — jumped by $41.8 billion, or 11.3%.
Revolving credit — typically credit cards — rose by a seasonally adjusted annual rate of 21%, up from 4% the prior month. Nonrevolving credit, which includes auto and student loans, was up 8.4%.
With pandemic stimulus payments now a fading memory — and families’ record savings cushion a thing of the past — it seems a no-brainer that out of control inflation has us back to running up our personal debt.
EU sanctions on Russia — as demanded by the bloc’s US master — have had a boomerang effect.
Instead of harming their intended target — largely self-sufficient Russia — they’re biting the hands and shooting the feet of bloc nations.
After weeks of toing and froing debates, what passes for EU “leaders” agreed on a sixth round of self-destructive sanctions on Russia.
They include delisting Russia’s Sberbank — one of the nation’s two largest banks — from the so-called SWIFT international payment system.
Stubborn, persistent, historically high inflation continues to make a splash as we approach another, otherwise relaxing weekend.
Earlier this week, Pam and Russ Martens at Wall Street on Parade featured Schlafer’s Auto Body & Repair in Mendocino, California, which was making headlines in quite the inauspicious way.
Schlafer’s, you see, is home to an independent Chevron gas station and as of last weekend, it was charging what the Martens say is the highest regular gas price in the country – at $9.60 a gallon.
That’s 50% higher than the average price for regular in all of California ($6.37), according to the American Automobile Association’s gas tracker, and essentially twice the national average ($4.91).
Now, the Martens point out that California is far from the only state where complaints of outrageous price gouging are being heard.
The Daily Record of Maryland reports that a Shell station in Bowie, MD, was charging $6.13 for a gallon of regular gas, at the same time an Exxon station “less than a block away,” was charging over a dollar less.
The lion’s share of gas stations in the U.S. are independently owned and operated – not by a major oil company.
Crack spreads — vernacular for oil refiners’ profits — have soared this year as gasoline demand outstrips supply.
They measure the difference between the cost of crude oil and the prices of refined products like gasoline — and are a key contributor to both profits at oil refineries and also prices at the pump.
Matt Phillips of Axios believes crack spreads will see more pressure as the Biden administration does everything in its power to push gas prices lower before November’s mid-term elections.
Already, stocks of the major oil refiners got hammered on Wednesday, heading into yesterday’s meeting between Energy Secretary Jennifer Granholm and top industry executives.
Marathon Oil fell 7%, Phillips 66 and Conoco Phillips both dropped 6%, while Chevron and Exxon both fell about 4%.
President Biden publicly is urging an increase in U.S. refinery production, saying bluntly, "I'm calling on the industry to refine more oil into gasoline and to bring down gas prices."
But earlier this year, as crack spreads soared, so did the share prices of major American refining companies, which are up a whopping 38% since January – even as the S&P 500 index has entered bear territory.
While surging profit margins for the makers of gasoline open the industry up to charges of price gouging, industry officials claim that they’re producing as much gas as they can right now.
Industry capacity utilization is running at 94% these days – the highest since 2018 when it hit 97%.
But a recent government report also showed that overall refining capacity has fallen in the last two years.
In fact, it’s now back down to where it was in 2014, meaning that supply will remain hurt even if refineries were to run at 100%.
So, with little chance of bringing new sources of gasoline – domestic or imported – online anytime soon, the administration's best chance to lower prices at the pump in the near term will have to come from leaning on OPEC+ to drill more oil or on refiners to accept smaller profit margins.
That, I predict, will become a growing source of agita for investors in oil companies – and other industries.
I’ve always been fascinated by trucks – big trucks; the ones with 18 wheels – and the men and women who drive them.
My first full-time job offer out of college way back in the day was from the American Trucking Association. That I declined that position to take one with another DC nonprofit didn’t negate my lifelong fascination.
One of my fondest memories of that era is my casual friendship with a guy who worked for National Geographic during the week and drove 500-1,000 miles roundtrip on weekends as an independent truck driver.
When he retired from National Geo, he drove a lot more miles every week in his big truck to support his true love (well, actually, true loves – if you count his lovely wife!).
When I read over a year ago about the nation’s big shortage of truck drivers, I worried about people like my old friend, not to mention its impact on our economy, with already messed-up supply chains.
More Truckers Than Ever
But today, more than 18 months later, Axios’ Emily Peck asks, what trucker shortage?
She writes that employers have managed to find and hire over 115,000 new truckers since the depths of the pandemic in 2020.
At the height of the supply chain crisis, which is still ongoing, transportation companies pointed to a shortage of truckers as a contributing factor.
Truckers and their advocates were quick to point out that low pay, poor working conditions and high turnover were driving the growing problem.
Now, Peck says the shortage is getting better, even possibly over – pointing to a report from transportation market research group ACT, which notes, "The driver supply flipped from shortage to surplus in early 2022."
The surge in hiring, according to Peck, comes as big wage increases and demand for trucks to deliver all the goods we've been buying are bringing loads of new drivers to the profession.
Plus, she adds, some of the health constraints of the pandemic have begun to fade away.
Now that federal stimulus checks are a thing of the past and prices are surging, driving a truck – in an industry with wage growth that’s outpacing inflation – looks unusually appealing.
Andrzej Tomczyk of too big to fail Goldman Sachs said employers "have been trying to hire like crazy ever since the pandemic-induced demand surge led to relative capacity constraints in the industry. So, it’s likely a reflection of some catch-up coming online."
Over 20,000 more long-haul truckers got jobs in May, the largest monthly addition of new truckers since 1997 – when the Bureau of Labor Statistics started tracking.
In fact, long-haul trucking employment is now 2% above pre-pandemic levels. And average weekly earnings were about 11% higher in May, compared to a year ago, for drivers in freight trucking.
According to BLS, the average weekly earnings of truck drivers have increased about 33% from January 2018 to May 2022, to $1,215 – which equates to $63,000 a year.
Many veteran and independent long-haul drivers earn a lot more. Recently, more drivers have bought their own truck and, according to Peck, are taking advantage of surging "spot prices" (live market rates) for hauling.
"A lot of people who wouldn't normally be a truck driver" became truck drivers, observed Kenny Vieth, president of ACT.
As the chart above shows, there are now a new millennium high of 1.1 million general freight truck drivers – up 28% from about 860,000 at the depths of the Great Recession.
In late June, I wrote in how crack spreads would “see more pressure as the Biden administration does everything in its power to push gas prices lower before November’s mid-term elections.”
Crack spreads measure the difference between the cost of crude oil and the prices of refined products like gasoline — and are a key contributor to both profits at oil refineries and also prices at the pump.
The spreads – aka oil refiners’ profits — have soared this year as gasoline demand outstrips supply.
While surging profit margins for the makers of gasoline have opened the industry up to charges of price gouging, industry officials claim they’re producing as much gas as they can these days.
Industry capacity utilization was running at 94% as the summer began – the highest since 2018 when it hit 97%.
At the same time, a Department of Energy report also showed that overall refining capacity has fallen in the last two years. In fact, it’s now back down to where it was in 2014, meaning that supply would be stifled even if refineries were to run at 100%.
So, I wrote, with little chance of bringing new sources of gasoline online anytime soon, “the administration's best chance to lower prices at the pump in the near term will have to come from leaning on OPEC+ to drill more oil or on refiners to accept smaller profit margins.”
That, I predicted, “will become a growing source of agita for investors in oil companies – and other industries.” Seems I was a tad overconfident.