The best cure for high prices is high prices and the best cure for low prices is low prices but could the rapid spread of the omicron variant be the beginning of the end of the covid 19 plague? Bloomberg News is reporting that early studies coming out of Africa suggest that Infection with the omicron coronavirus variant can give immunity against the earlier delta strain. If that is the case, could we be getting closer to a point where the human race will develop immunity to this plague and it will be less deadly?

The oil market is putting at least some fear of the omicron variant behind it and is surging on a path back to the pre-omicron price collapse that went far beyond reason. Even the Biden administration is saying that a federal response to covid lockdowns may not be the solution as they wave the white flag on defeating the virus. The Hill reported that “Biden is resisting school closures and other shutdown measures in the face of the highly transmissible omicron variant as the public grows increasingly weary about a seemingly never-ending pandemic and confusion over mixed messages from health officials. Biden is trying to urge people to take precautions, but his speech on Tuesday represented a shift from earlier messaging. No longer is he endorsing strict mitigation measures, such as nonessential business closures, and the concept of social distancing is hardly mentioned. Biden is facing the limits of what he can accomplish. The administration is pushing testing and vaccines, which it cites as part of the reason for not needing stricter pandemic measures, but there is no political appetite for anything stronger.”

Now the energy markets are facing the reality of a sharp drop in oil inventories that should accelerate in tonight’s American petroleum Institute report where we could see crude supply fall by close to 6 million barrels. That is even after the fact that the Biden administration announced it released 50 million barrels from the Strategic Petroleum Reserve which helped drive U.S. oil exports to record highs but did little to lower gas prices. While gas prices did dip on omicron fears, the reality is that while today’s national average of $3.28 is 11 cents less than a month ago and $1.03 more than a year ago. This is still a historically high gasoline price and is a drag on the poor and middle class.

Photo by Zbynek Burival on Unsplash

Biden’s war on energy as well as Europe’s energy transition is accounting for explosive gas prices around the globe. Biden’s desire to add billions of dollars of taxes on the U.S. oil and gas industry as well as an Energy Department leadership that has no experts in oil and gas whatsoever has created an adversarial relationship with this industry. While they try to point to the fact that permits are up and production is up, under Biden those comments failed to grasp the reality of what was going on in the global oil market and why the Biden apologists missed the biggest run-up in gasoline and oil prices in the last year and continue to get it wrong.

Trilby Lundberg in her much anticipated quarterly “Energy Détente” pointed out that world motorists are now hard-pressed with high prices curtailing mobility and strained economies. Her report finds that 28 nations are now subsidizing gasoline trying to shield citizens or deliberately delay a sluggish government response. Trilby Lundberg points out that Western Europe remains the highest price for gasoline due to extreme taxation with the average price in Western Europe at $7.21 a gallon. That is up to $1.81 since June of 2020 and is the most extreme price hike among the regions. The second-highest spike in gasoline prices is in the Asia Pacific region which saw an increase of $1.13 a gallon. Eastern Europe prices were hit less hard as a Roach is $0.71 per gallon.

Natural gas prices are trying to break out as cold temperatures are supposed to hit and the export market continues to be strong. The U.S. LNG exports will continue to surge near record highs.