Mark, I really enjoy reading your newsletter and learning about a somewhat different, but always well-informed, take on today's issues, whether or not I agree with your conclusions. Often I do not. However, I felt compelled to react to something you wrote at the end that I found flippant and lazy: "When supply goes down, prices go up." Yes, it's the economy, stupid. (I always hated that condescending impatience, from the moment it hit the press.)
You are incorrect to blame the fall in supply fully on the restrictions introduced by the Biden administration, who enacted what they were elected to do. Canada has excess pipeline capacity and not enough oil to supply the United States in any case. Keystone XL would have diverted Canadian oil from refineries in the Midwest to the Gulf Coast where it could be refined and exported to international buyers without paying U.S. taxes. The supply is restricted because we have given enough latitude to oil companies that they can, quite naturally, choose to sell to the highest bidder, no matter where they are in the world.
Oil prices in the U.S. (and elsewhere) continue to increase, despite a large increase in U.S. crude inventories this spring. The problem is not the Biden administration but the oil industries' worries about tight global supply and its own bottom line.
Mark, I really enjoy reading your newsletter and learning about a somewhat different, but always well-informed, take on today's issues, whether or not I agree with your conclusions. Often I do not. However, I felt compelled to react to something you wrote at the end that I found flippant and lazy: "When supply goes down, prices go up." Yes, it's the economy, stupid. (I always hated that condescending impatience, from the moment it hit the press.)
You are incorrect to blame the fall in supply fully on the restrictions introduced by the Biden administration, who enacted what they were elected to do. Canada has excess pipeline capacity and not enough oil to supply the United States in any case. Keystone XL would have diverted Canadian oil from refineries in the Midwest to the Gulf Coast where it could be refined and exported to international buyers without paying U.S. taxes. The supply is restricted because we have given enough latitude to oil companies that they can, quite naturally, choose to sell to the highest bidder, no matter where they are in the world.
Oil prices in the U.S. (and elsewhere) continue to increase, despite a large increase in U.S. crude inventories this spring. The problem is not the Biden administration but the oil industries' worries about tight global supply and its own bottom line.