Source: Hot Air
We’ve known for some time now that Joe Biden has been selling off the nation’s Strategic Petroleum Reserve at a steady pace. It adds up to millions of barrels of oil per day. He’s even been selling some of the oil to China and other foreign markets. This was all being done in the interest of bringing down gas prices ahead of the election, though it hasn’t had all that much of an effect. The releases mostly just stopped the prices from going up even faster. Analysts at the Institute for Energy Research have been monitoring the situation closely and their latest report suggests some bad things are on the horizon. First of all, the SPR is at the lowest level it’s been in 37 years and it will continue to be depleted up until a few days before the election. At that point, the sales will supposedly halt, and along with them, the braking effect that’s been applied to gas prices. Shortly after the election (conveniently), gas prices are now projected to begin rising again and they will exceed five dollars per gallon by the end of the year.
President Biden is depleting the U.S. Strategic Petroleum Reserve (SPR), which is currently at its lowest level in 37 years. On July 26, 2022, the U.S. Department of Energy announced an emergency sale from the reserve of up to 20 million barrels, which will go through the end of October, just prior to the mid-term election in November. And, along with that announcement, Goldman Sachs revised its forecast for gasoline prices upward to $5 a gallon by the end of the year.
Previously, its price forecast was at $4.35 a gallon. That’s because, despite the Biden SPR releases, the market must still balance demand with tight supplies. According to Goldman Sachs, a sustained $5 price should eventually solve the market deficit. The $5 gas price is accompanied by a Brent futures price expectation of $130 a barrel.
What the White House has been doing truly is the equivalent of bribery, though it’s the energy market that’s been accepting the bribes. By artificially driving the price of oil lower via emptying the SPR, the natural ebbs and flows of the oil marketplace are dampened. But that situation isn’t going to hold permanently. As soon as the SPR oil stops flowing to the market, the prices will rise substantially. Brent Futures predicts that oil will be back up to 130 dollars per barrel. But by design, that won’t happen until after the election and Biden and his party can stop worrying about how upset people are when they can’t afford to fill their tanks.
Meanwhile, the SPR will be massively depleted and the government will have to pay hugely inflated crude oil prices to begin refilling it. (Most of the oil currently left in the reserve was purchased when oil was selling for 60 dollars per barrel or less.) And that’s assuming that they even plan to replace it. That oil is supposed to be there in the event of hurricanes, earthquakes, or other natural disasters that can shut down the power grid for extended periods of time. Emergency generation plants can be brought online to produce power locally, but they almost all burn oil. If there’s no oil available, bad things happen quickly.
These efforts to artificially tinker with the energy market are very similar to all of the wind and solar subsidies that the Democrats keep jamming through Congress. As long as renewable energy looks relatively cheap to produce, people will keep investing in it to the detriment of the oil and gas industry. But when the bribe money runs out, the costs of those renewable energy sources will shoot up in a similar fashion. You can only bribe the system for so long before the energy chickens come home to roost.
The amazing part is that the Biden administration is unapologetically doing all of this right out in the open, trusting that the media will largely ignore the story. (And they’ve lived down to those expectations so far.) Joe Biden actually had the nerve to schedule the end of the SPR drain a few days before the election. It takes a week or so before the market forces catch up and the prices begin to rise. So he’s doing this strictly to try to gain political advantage with no plan in place as to what we’re supposed to do once the election is safely behind him.