- Today, oil prices roared back—up almost 4% on the day (the biggest mover in global markets).
- Last year at this time, heading into Memorial Day weekend, the national average price on gas was $1.87.
- Heading into this Memorial Day weekend it’s $3.04. I suspect it will be higher by the time we get to the weekend.
A Forbes news by Bryan Rich says that Oil Prices Roaring Back Just In Time For Memorial Day Travel.
We talked about the correction in oil prices last week as an opportunity to buy the dip in energy.
Here’s an excerpt from Bryan Rich’s note
This dip in the energy/oil and gas sector is a buy. The globally coordinated ’Clean Energy Revolution’ promotes higher oil prices, not lower.
That’s the structural driver for oil prices. Funding for new exploration has been choked off. So, foreign oil producers (particularly from bad acting countries) will be in the driver’s seat.
That movement is underway. And these producers will command/demand higher prices, especially in a less competitive, lower supply world.
$4 plus gas
As discussed this dynamic back in February, I said ‘get ready for $4 plus gas.’
With the monetary and fiscal backdrop that has evolved, and the inflationary pressures already bubbling up, it will probably be more like $6 gas.
It will be self-fulfilling, and yet it will become the justification for the move to “clean energy” (just as high gas prices were in the Obama era).”
Underestimation of economic impact
The focus in the oil market has been all about future demand—meaning less demand, driven by the fantasy of rapid change to ubiquitous electric vehicles and wind farms.
Thus, they have underestimated demand and therefore they have underestimated the economic impact that is coming down the pike from regulating away supply (from the climate activist movement).
A boom in economic activity
Here we are, just getting to the point of a boom in economic activity, following the CDC’s recent guidance changes.
And oil prices are already back above pre-pandemic levels, and the estimates from the expert community on oil demand are just now being revised UP.
As we’ve discussed, this “energy transformation” dynamic continues to plot the path toward another $100-plus oil price environment.
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Source: Forbes
