Posted November 16, 2022
By Matt Insley
No Diesel, No Deliveries
Of course, The Rundown has been following Europe’s energy crisis for months now, including the damage Western sanctions have wrought.
To wit, Paradigm analyst Dan Amoss passed along the following tweet:
The picture on the right is from Dec 5, 2021; the picture on the left shows a current “cold bubble is super charged with ice cold air of -84C in the core,” says chemical engineer Heinrich Leopold.
“Eventually this cold air will be distributed over the Northern hemisphere,” he notes, “resulting in a long and cold winter.”
And for more on the energy crisis – this time stateside – read on…
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Your Rundown for Wednesday, November 16, 2022...
Paying for Biden’s Missteps
In early November, “the Energy Information Administration (EIA) reported that distillate inventories were at their lowest levels since 2008,” according to Oilprice.com. Primary distillates being diesel, jet fuel and heating oil.
“However, in 2008 distillate levels were low coming out of spring. Currently, they are low going into fall. That’s far worse than the situation in 2008. In fact, distillate inventories haven’t been this low… since the EIA began reporting this data in 1982.”
Paradigm’s macro expert Jim Rickards adds: “The U.S. typically has a 30-day supply of diesel that is continually topped up by new deliveries from oil refineries.
“Today that supply is under 25 days…
“Critically, the refineries can’t keep up with demand so the supply is dwindling by the day and cannot easily be replenished.”
Plus, “the loss of… Russian imports have caused problems for refineries as they struggle to fill holes in their product slates,” says Oilprice.com.
“Refineries do have a small amount of flexibility in shifting gasoline production to diesel production. But it’s a relatively small amount… That also means that if refiners do shift production, that also potentially creates shortages in the gasoline market.”
Jim continues: “The U.S. has not added any refinery capacity since 1977. There’s no inclination to invest in new refinery capacity because the Biden administration has threatened to destroy the U.S. oil and gas industry.
“Why invest in an industry that’s targeted for destruction by the White House?”
Since diesel fuels all the trucks – and trains – that deliver consumer goods to stores (or your front door)... no diesel, no deliveries.
If the Biden administration hadn’t made the gas-and-oil complex the whipping boy for the world’s ills, we might not be in this predicament. Nevertheless, everyday Americans will be paying for it this winter. To say nothing of this holiday season…
Market Rundown for Wednesday, Nov. 16, 2022
S&P 500 futures are nominally in the green at 4,000.
Oil is down 1% to $85.94 for a barrel of WTI.
Gold is up 0.35% to $1,783.30 per ounce.
And Bitcoin’s chopping down 1.7% to $16,500.
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