Energy Report: Delta Done

Petrol, Gasoline, Diesel, Gas, Automotive, Prices, Oil

Image Source: Pixabay

Oil prices are coming back in pure turnaround Tuesday fashion on hopes that maybe, just maybe, the delta variant of the COVID-19 virus might not be as big a threat to global demand that traders feared just 24 hours ago. The crude oil market closed strong into yesterday’s close, well strong from the lows made after a headline that said the EU would not impose travel restrictions on the U.S. despite the covid surge. That seemed to offset news that China Petroleum & Chemical Corp., the nation’s largest refiner commonly known as Sinopec, is cutting run rates at some plants by 5% to 10% compared with previously planned levels this month according to a report from Bloomberg. From a daily technical support level, if we can maintain the rally, it looks like oil successfully defended the assault of $65.00 a barrel looking more like a solid floor or the number for bears to beat if they are going to be successful in crashing oil further.

RBOB futures seemed to be the most solid petro product as demand stays strong despite covid. Retail gas prices dipped to $3.186 for a national average according to AAA. That is down from $3.19 yesterday which AAA says is the most expensive gas price average of the year as well as $1.02 more than a year ago, a nickel more than a month ago, and two cents more than a week ago. Pump prices fluctuated across the country last week with states seeing as much as a nine-cent jump to a seven-cent decrease. The variation in prices is partly attributed to the U.S. seeing an increase in demand and decrease in stocks, according to the Energy Information Administration (EIA), demand was 2% higher than the same period in 2019, while gasoline stocks are about 1% below.”

As I have written before, while we may see some gas price breaks, under the Biden administration, we are going to be in an era of high gasoline prices. The great energy transition and infrastructure bill will only add to the cost of gasoline and the poor will bear the brunt of these policies. Of course, if you believe the doom and gloom predictions of the United Nations Intergovernmental Panel on Climate Change (IPCC), the organization is known for stretching facts on data, it's predicting that if we don't pay ridiculously high prices for gasoline, the world is going to be in deep trouble.

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