In running track relays, you put your second-best runner first and your fastest last. In my inflation race, it does not really matter. If I were to second guess myself with today's climate, shelter/housing would be first and oil, last. However, I am aiming to show you my point when I finish this segment next week. Today, we look at oil, the most important commodity. We begin with you...
Everyman
If you live north of the Mason-Dixon line, you experience winter. If you live south of the boundary, you want AC come summer. So, those of us in the northern half of the nation, might put on the heat to take the night chill off the house. This is oil or it is needed to make the energy that warms your home. If you drive to work, more oil. If you take a bus or subway/train, oil is needed to provide the energy for the machinery. It does not matter your employment, energy is needed. The trip home is a replay of the morning commute. When you realize the truth about the need for oil, you can begin to see why I say, End the Fed!
They have the nerve to get away from their inflation matrix with no oil.
In the South, your energy bill is low during winter. However, come summer, you feel the pain of the different season. In any event, we see that all of us need oil and its ability to help create other energy like gas and electricity. In the US, we use around 20 million barrels of oil every day. Today's energy prices reflect the lack of preparation in developing energy alternatives. We had plenty of time to develop other forms of energy. This gives insight to our lack of leadership and their vision for our society. In Europe, Germany is crucial. They have implemented alternative energy. To their credit, they receive 20% from this category. However, they and other "cold nations" could have worked with the US and Norway/Sweden to develop LNG for winter heat. They need to sacrifice some cold for the greater good. They need to help put Russia in their place. Russia should seek to make their domestic economy better with all the natural resources that they have. This shows the lack of goodwill among the Communist with their doctrine that every man be treated equally: all talk, no action.
Peace Talks...
are BS! The communist has demonstrated over the years that they only do what is in their benefit. Quick reminder: Korean conflict had talks for three years. Viet Nam had talks for over four years. Putin declared that he would not invade Ukraine. Talk is cheap! We need action! The price of oil jumped due to the possibility of actions by Russia. They supply 7 million barrels a day. We need to make them realize that maybe we can get along fine without their oil. Ultimately, electric cars will dawn the light on them. If there are no buyers for your product, you are out of business. Don't count on peace talks to get the price of oil to decline. Back to reality. Back to the price of oil...
Brent or US Crude?
Brent is heavy oil and US crude is light. Light is better, but heavy has a more plentiful supply. Many users have switched their mechanics to use the heavy stuff. In any case, they both follow the same price pattern with Brent getting a little higher premium. The recent price action on Brent had it touch $139, then it fell to $95. It bounced again to $119, and it is now in retracement. It settled at $101 on Friday.
US crude follows the same price movement. It closed at $98 on Friday. This type of price action is exactly what will continue to happen. Oil will jump or decline on news, data and expectations. However, you and I feel only one thing - a higher price. Oil has increased in price by 80% from last year. This equates to everyman having to cover the cost and still make ends meet. Some of us have already dropped the baton. This race is over like your football team being down by 3 touchdowns at the end of the third quarter. Some of us will need a second job and or, cut back on things like TV streaming. We need to put some money aside for that electric vehicle. It is closer than you think. Peace.
