Energy Report: Oil March Madness

Triple-A reports that the national average gas price for regular unleaded has hit $2.720 a gallon. The price increase is going to take more money away from the much-needed stimulus check that the Biden administration is pushing. It is so sad and wasteful that so much money in that bill has nothing to do with relief for Americans. Gas prices are headed towards $3.00 a gallon and if Biden continues to restrict U.S. oil producers, the odds are it is going much higher than that. The energy risks are rising and it will be the little guy that gets hurt.

U.S. manufacturers need to get hedged as natural gas supplies may get squeezed as the Biden administration cracks down on fracking and rejoins the jobs killing Paris Climate Accord. The U.S. manufacturers have had an ace card in the global market with some of the cheapest natural gas prices in the world due to fracking. Yet Biden is giving up that advantage and no doubt the jobs that were created because of that advantage.

This comes as the Energy Information Administration (EIA) reports that Significant demand for natural gas in mid-February led to the second-largest reported withdrawal of natural gas from storage in the United States, according to the U.S. Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report (WNGSR). Weekly stocks fell by 338 billion cubic feet (Bcf) in the week ending February 19, 2021, nearly three times the average withdrawal for mid-February. A record amount of natural gas, 156 Bcf, was withdrawn during that week in the South-Central region, which includes Texas.

Colder-than-normal temperatures across much of the Lower 48 states, especially in Texas, led to increased demand for space heating. Population-weighted heating degree days (HDDs) represent temperature deviations lower than 65 degrees Fahrenheit and are weighted based on population distributions across the country. For the week ending February 19, U.S. HDDs reached 254, or nearly 40% colder than normal, according to the National Oceanic and Atmospheric Administration.   

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