Who Let the Bulls Out? Energy Markets Heat Up Amid Rising Oil Prices and Market Gains
Who let the bulls out? Woof woof. The days are getting shorter, but things aren’t getting any cooler – in our atmosphere or in the energy markets. For the week, both crude benchmarks were up about 3% after gaining about 4% last week. Brent ended the week at $85.24 a barrel and WTI crude settled at $80.73, gaining back the losses from the beginning of this month. Bolstering the bull riders was news that U.S. crude inventories fell by 2.5 million barrels – more than expected. Supporting this data was news that domestic gasoline demand notched a post-COVID high, ringing the bell at the carnival at 9.4 million barrels per day as both gasoline and diesel inventories had big drawdowns. School’s out for summer and the roads are packed. Traffic sucks. Of course, just like in any market, there are competing opinions. A Citi analyst predicted that oil prices will return to the $60s range by 2025 forecasting that supply will outstrip demand. That’s typically how it works. As Billy Joel once said, Don’t wait for answers Just take your chances Don’t ask me why.
Here is some refreshing news on the refining front. Props to Element Fuel Holdings LLC for planning on spending between $3 and $4 billion on a refinery to be located in the Port of Brownsville which is expected to produce more than 160,000 barrels per day of gasoline, diesel, and jet fuel from shale oil production. The project would take advantage of the region’s length in shale crude and the country’s shortage of refining capacity. The plan is that the project will produce a sufficient volume of low-carbon hydrogen to supply roughly 100% of the refinery’s fuel requirements. Clean and green. By the way, for those interested in Brownsville, The Tank Tiger has storage to show you down there. On top of that, The City of Brownsville is ranked No. 4 as one of the best affordable places to retire by U.S. News & World Report. Now, let’s discuss air conditioning.
The stock market also heated up as the S&P 500 secured a three-week win streak on Friday. Those trumpeting AI were able to do some chest thumping as chipmaker Nvidia became the world’s largest publicly listed firm on a market cap basis. It’s not quite Skynet, but it’s become a wee bit more than Deep Blue winning a chess match. Can’t we use artificial intelligence, or perhaps just some plain old common sense to reel in our federal budget deficit? It’s now predicted to expand to $1.9T this year, exceeding the previous estimate of $1.5T. Our National debt is now predicted to pass $56T over the next 10 years, which would be 122% of our GDP. No politician has the luxury of pointing fingers, because it has been everyone’s fault for years and years. Of course, none of this will be discussed during Thursday night’s debate. If Polonius were running for President, he’d get my vote for giving parting advice to his son Laertes, who was going off to college: “Neither a borrower nor a lender be, for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.”
