A Timeline of Events and Some Thoughts

How did we get where we are?

In previous postings, I made mention of the repeal of the Crude Export Act in 2015. That set the stage for exporting of crude from the U.S., which was due in part to drill baby drill and lowering of WTI prices within the U.S. As a result, ALL crude oil became priced on the global market demand. At that time, exports were limited to Alaskan Crude and daily exports were in the 500K barrel range.

Also at that time, WTI crude had fallen to $34.74 per barrel and gasoline stood at $2.026 per gallon nationally. This was down from the high of $100+ per barrel in July of 2014, as was gasoline at $3.60+ per gallon. Which was prior to drill baby drill taking hold. Hence the necessity to do something for the drillers.

In February 2020, WTI crude had risen to $51.43 and gasoline to $2.466. Exports of Crude were in the 3.5M barrels daily.

Of course, February 2020 gave us the first glimpse of COVID. With Covid the infamous negative futures price of -$37.63 in April (Monthly average at $17.13). People were paying someone else to take delivery of crude. Gasoline fell to $1.773 by end of April. Crude exports slowed to the 3M barrel daily level.

[All data from EIA.GOV]

The crude prices stayed in the $40 range until December 2020 and gasoline in the $2.20 range. It was about this time that an antsy public was given hope via vaccines. By February 2021, crude was in the $60 range and gasoline had jumped to $2.60+. 

While there had been spot shortages of many goods early on, they had mostly eased by this time, as well. There were lingering shortages of materials to repair equipment, build cars, etc. The economy was still out of balance, in my opinion.

As the shots became widely available and hopes of finally ridding covid seemed on the horizon... consumers became increasingly anxious to get out of lockdowns, etc. 

The economy had largely survived due to stimulus. It was in February that Texas had the big freeze, with impacted refining and saw gasoline jump to $2.80 range. 

Then came the 3rd stimulus, which even Miss Transitory thinks was too much... in retrospect.

It is nearly impossible to avoid what happened next, as the American Consumer went all in on a spending spree. This resulted in port backups, intermodal congestion and Just in Case inventory. Which in turn resulted in this...

Crude also began its climb, as demand increased. By end of 2021, it was nearing $80 and gasoline was in the $3.30 range. We were still exporting around 3M barrels per day. Even with the shuttering of older refineries. Why spend money on something that is being phased out, due to climate change?

Then came Ukraine and the recognition that Europe is dependent upon Russia. Before the invasion, Crude had already climbed to $92 and gasoline to $3.60. 

Interestingly, certain politicians have advocated assisting Europe wean itself from Russian energy. Even an age-old enemy such as Venezuela is now somehow to be considered friendly. An old friend (Saudi Arabia) that became NO longer a friend, is now to be once again... viewed favorably.

We are now exporting 3.5M barrels on average per day since March and some days goes above 4 million. And it's not just crude, but refined products as well. 102,309,000 barrels of crude and petroleum exports ABOVE what has been imported since first of March. Oh and 14,091,000 barrels of gasoline have been exported in that period, ABOVE imports.

Here is how it has flipped since this period in 2019...

I have highlighted the flip areas. Where once we imported more of all products, than we exported AND where we once imported more gasoline than we exported. 

In my opinion, we would still be seeing record prices at the pump, although not in the $5 range (certainly above $4 and still be complaining). So, it would be correct to blame the current prices on Putin, but to run around suddenly buddying up some folks, releasing SPR to the tune of 1M barrels a day, then complain about refineries doing what you asked, is a bit much. I am not defending refineries, just noting the hypocrisy of certain politicians.

What's next... blaming the high prices on climate change? We are just one hurricane in the Gulf from the blame game to shift to that very item. I also found the timing of blaming refineries, just as he or his henchmen got advance news of impending bad economic reports. Those bad economic reports have caused the futures of both crude and gasoline to fall nearly 10% this past week. 

I'm sure the subsequent fall in pump prices will be extolled as proof the refineries were gouging us. And many Americans will believe it, report it, etc. One reporter noted that we consumed 10% more gasoline this past week than the previous week, although the data says -1.0% for the week and -2.9% year over year. Seriously, are we that ignorant, not to see through these lies? Apparently, the answer is yes. 

Which brings me to the IQ of the American people. On certain social media boards, there are still individuals saying we should drill more, etc. without regard to the fact we are exporting. Some people haven't gotten the news or are ignoring it for political gain. 

Of course, the thread that caught my eye, was regarding the falling IQ of Americans. According to one individual, the IQ of Americans was once 110 and has now fallen to 99 and is a clear indication of our stupidity. That no one pointed out the obvious flaw and piled on to that belief... does indicate our stupidity. I doubt anyone caught the irony of the original post, including the original poster.

I consider myself of average intelligence and possibly with age... below. It is kind of scary to think where we are headed.

_{#gasoline #covid #crude-oil #alaska #opinion #exports}