Monthly Archives: January 2022

Ninety Bucks is Not a Deer Herd

Oil prices have skyrocketed and supply chain issues and the Biden administration’s war against petroleum is backfiring big time. We will likely see $100/bbl. oil by the middle of spring. And the American consumer is being hammered. Part of this is the sudden ramping up of demand but states like Colorado as well as Federal lands are scaring off drillers. The result will be a concentration of oil production and drilling in the more traditional oil states, Oklahoma and Texas as well as surrounding areas.

This will also create a bottleneck as pipelines to Pennsylvania and Ohio are closed to going to the markets that are in New England. The end result may be a crisis yet if February turns off cold. You can thank New York for forbidding pipelines across them to service gas short places like Boston. Further, higher consumption in the Midwest means they care a lot less about eastern and west coast markets. They have no incentive to supply them with cheap oil and gas after the way those states treat oil rich states.

This will be a tough year with either growth only fueling inflation, or lack of growth precipitating a recession that Biden can ill-afford just before the mid-term elections. Go Brandon!