Image from Granholm's website

Hello Europe, Especially Germany

Hello Europe, the US Threatens to Shut Off Energy Exports.

America’s allies in Europe are desperate for alternative supplies of fuel amid the Ukraine war, and U.S. producers are happy to provide what they can. So wouldn’t you know the Biden Administration now wants to limit fuel exports.

That’s the message Energy Secretary Jennifer Granholm sent last week in a letter imploring seven major refiners to limit fuel exports. We obtained a copy of the letter, which the Administration didn’t release publicly. Ms. Granholm warns that gasoline inventories on the East Coast are at a near-decade low, and diesel stocks are nearly 50% below the five-year average across the region.

“Given the historic level of U.S. refined product exports, I again urge you to focus in the near term on building inventories in the United States, rather than selling down current stocks and further increasing exports,” she writes.

“Given the historic level of U.S. refined product exports, I again urge you to focus in the near term on building inventories in the United States, rather than selling down current stocks and further increasing exports,” she writes.

“It is our hope that companies will proactively address this need,” she adds. “If that is not the case, the Administration will need to consider additional Federal requirements or other emergency measures.” 

What a Hoot!

Biden runs down the Strategic Oil Reserves for political, not economic reasons, and now threatens exporters. 

The WSJ points out "Fuel storage levels would be much higher in the Northeast if not for New York state’s natural gas pipeline blockade, which has made the region more dependent on oil for energy. One-third of New England residents still use oil to heat their homes, and New York this month is generating more electricity from oil than from solar or wind."

Natural Gas Ripping Higher

(Click on image to enlarge)

Natural gas price courtesy of Trading Economics

Here we are, headed into hurricane season, with the administration having run down oil reserves.

Meanwhile, natural gas prices are ripping higher. 

Since August 2, the price of natural gas is up 21.8 percent. 

The Average US Household Pays 47 Percent More for Electricity Than a Year Ago

CPI data from the BLS via St. Louis Fed, chart by Mish

On August 21, I noted The Average US Household Pays 47 Percent More for Electricity Than a Year Ago

Heaven help the EU if Biden issues a mandate shutting of all energy exports.

Given the price of gasoline has mostly stabilized for August, but electricity hasn't and rent likely hasn't, don't expect another "no inflation" reading in the next CPI report.

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