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Unleaded Gas Headed to Another Record High, Biden to Address the Nation

Unleaded gas futures hit a new record high last week. Pump prices will follow. On Tuesday, Biden will comment on inflation.
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Unleaded gas price courtesy of Nasdaq, annotations by Mish.

Unleaded gas price courtesy of Nasdaq, annotations by Mish.

New Record Pump Price Coming

A record futures price portends a record price at the pump

Diesel is already there. 

AAA Gas Prices 

Gas price chart courtesy of the AAA.

Gas price chart courtesy of the AAA.

EU Proposes Ban on Russian Oil 

In a speech to the European parliament, on May 5, European Commission President Ursula von der Leyen sought solidarity on Russia.

"We now propose a ban on Russian oil. Let's be clear: it will not be easy. But we simply have to work on it. We will make sure that we phase out Russian oil in an orderly fashion, to maximize pressure on Russia, while minimizing the impact on our own economies."

CNN noted the Proposed Ban Ran Into Immediate Objections.

On May 5, the EU Proposed Ban on Russian Oil

"The proposal on behalf of Brussels is suggesting that it should be done by the end of next year," Zoltan Kovacs, spokesperson for Prime Minister Viktor Orban, told CNN's Eleni Giokos. "The shortest period, we've been clear on that, our oil companies have been clear on that, is three to five years."

Hungary said it couldn't back the proposal in its current form because it was worried about what it would mean for the country's energy security. Nearly 60% of its imported oil came from Russia in 2021, according to the International Energy Agency.

"The very essence of decision-making in Europe is consensus," Kovacs said. "We've been telling Brussels and all the European states, that on Hungary's behalf, it simply cannot be done as they require."

Slovakia — which got 92% of its oil imports from Russia last year — and the Czech Republic have also sought longer transition periods than those envisaged by the EU plan, Reuters reported.

Sanctions Fail Again

The price of gas jumped on the news. The whole notion of cutting off Russia simply will not work.

Nonetheless, ClimateWire offers this nonsensical headline E.U.’s Russian oil ban could reduce global emissions

So we are looking at the overall shrinking oil production capacity of Russia, which will likely lead to reduced emissions from the Russian oil and gas sector,” said Maria Pastukhova, a senior policy advisor for climate think tank E3G.

Yeah, right. 

Who the hell is funding this idiotic think tank?

Despite the nonsensical headline, the body of article points out the silliness of it all. 

Yesterday’s sanctions proposal also includes a measure that would prohibit insurance firms and E.U.-owned shipping companies from providing services linked to the transport of Russian oil to other destinations, The New York Times reported.

That could lead to more extensive disruptions of international oil flows than the embargo alone, since as much as 95 percent of the world’s tanker fleet is arranged through London-based insurance providers, according to Rystad Energy.

Without secondary sanctions on shipping, a full oil embargo could lead to a rerouting of oil cargoes to more distant markets. And that could lead to more emissions, as tankers burn more fuel on longer transport routes, said Alan Gelder, vice president of refining, chemicals and oil markets at Wood Mackenzie.

De-Globalization: New Supply Chains Are Inefficient and Will Drive Up Inflation

Global map from Nations Online Project, annotations by Mish

Global map from Nations Online Project, annotations by Mish

By the time Hungary agrees to cut off Russian oil, Russia will have working pipelines to China and perhaps India. 

The same thing is happening with natural gas proposals 

Scroll to Continue

RECOMMENDED ARTICLES

For discussion of energy rerouting, please see De-Globalization: New Supply Chains Are Inefficient and Will Drive Up Inflation.

Lose, Lose, Lose

  • It will take months longer for oil to get where its headed. 
  • The price of oil and natural gas rise
  • China gets new supply chains
  • Rerouting means more emissions
  • Europe's need for oil does not change one bit

Biden to Address the Nation

In the "Gee, I can hardly wait" category Axios reports Biden targets GOP on inflation as prices skyrocket

President Biden is preparing a major speech Tuesday to address inflation, and will contrast his plans to lower costs for American families with those offered by congressional Republicans, an administration official told Axios.

At the White House on Tuesday, Biden will focus on GOP plans, like those from Sen. Rick Scott (R-Fla.), which Democrats say will raise taxes on some 75 million Americans, and could sunset entitlement programs like Medicare and Medicaid.

I expect another push for Build Back Better and more free money to combat rising prices. 

Of course, it's free money, sanctions, absurd interest rates, and QE by the Fed all the way through March of 2022 that fueled inflation. 

All the proposals by Biden to date will increase inflation. 

However, it appears Rick Scott announced a plan that will never fly and Biden will attack that plan.

McConnell clashes with Rick Scott over Republican agenda

Politico reports McConnell clashes with Rick Scott over Republican agenda.

While McConnell prefers to keep the heat on Democrats and make the election a referendum on President Joe Biden, some in the party — not just Scott — believe Republicans need a more affirmative agenda.

The schism played out on into Tuesday at a leadership press conference. Scott exited the event abruptly just before McConnell castigated two of his proposals.

“Let me tell you what will not be a part of our agenda: We will not have as part of our agenda a bill that raises taxes on half the American people and sunsets Social Security and Medicare after five years. That will not be part of the Republican Senate majority agenda,” McConnell said.

And McConnell made clear he’s planning to be fully in charge in 2023: “If we’re fortunate enough to have the majority next year, I’ll be the majority leader. I’ll decide, in consultation with my members, what to put on the floor.” He didn’t offer specifics of what his agenda would be beyond topics like inflation, border security, crime and energy.

Campaign Issue

Scott just handed the Democrats a campaign issue on a silver platter. 

Telling a Florida population he will sunset Social Security and Medicare is an enormous political mistake even if those policies are bankrupting the country.

Scott's term ends in 2025 and I suspect he will not be reelected. Since he is 69 years old, perhaps he plans to retire and just doesn't care. 

This post originated at MishTalk.Com.

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