From Tuesday, Oct. 25, to Thursday, Oct. 27, oil prices in America rose following reports that the White House has been exporting record levels of crude oil and fuel. Increased demand for American oil comes as the dollar’s value weakened, making American oil more attractive to foreign buyers. (Related: Expert: Biden’s drawdowns from Strategic Petroleum Reserve failed to control soaring oil prices.)
Some of the world’s main benchmarks for gauging the price of oil have been rising these past few days.
On Tuesday, futures contracts for Brent Crude, representing oil from the North Sea in Northwest Europe, was $93 per barrel. By the time the market opened on Thursday, the price was nearing $96 per barrel.
Futures contracts for U.S. West Texas Intermediate, representing oil taken from oil fields in Texas, fared no better, rising from $84.76 per barrel on Tuesday to over $88 on Thursday.
David Solomon, chief executive officer of Goldman Sachs, warned that rising oil prices will have detrimental effects on the American economy and could make a recession more likely.
Solomon noted that the Federal Reserve could raise its benchmark overnight interest rate once more beyond the 4.5 to 4.75 percent range if it does not see real changes in the economy. Given the way oil prices are rising, this is becoming increasingly likely, leading to a feedback loop that will plunge America and the world into a massive recession.
The situation could be made worse if President Joe Biden attempts to interfere in the oil market. There are expectations that the record earnings of major oil companies could slow down due to a recent statement made by Biden that the profits of America’s five largest oil companies were “not fair.”
America still exporting millions of barrels of crude
Last week, total U.S. petroleum exports hit a record-breaking 11.4 million barrels per day. The surge in oil exports was reported just as domestic fuel inventories were hitting historic seasonal lows, highlighting concerns that the country’s oil supply is diminishing rapidly.
This rise in exports was buoyed by the weakening dollar, which is currently trading near a three-week low. This makes raw materials priced with the dollar cheaper for many overseas buyers holding different currencies. This includes dollar-denominated oil indexes like Brent Crude and West Texas Intermediate.
“The more recent weakness in the dollar has provided some tailwinds to the oil market, while falling U.S. gasoline inventories and record petroleum exports have only provided a further boost,” noted Warren Patterson, head of commodities strategy at ING Group. “As for the outlook, much will depend on how the macro picture evolves, but oil fundamentals look increasingly constructive in the months ahead, which suggests higher prices.”
America’s increasing oil exports, combined with tightening global markets for liquefied natural gas and production cuts by major oil producers are all converging to put the world in the middle of what Fatih Birol of the International Energy Agency (IEA) called “the first truly global energy crisis.”
Phil Flynn, an analyst with the Price Futures Group, responded to the IEA’s concerns by pointing out that the energy crisis is unlikely to end if concerns regarding supply are not addressed.
Read more stories like this at NewEnergyReport.com.
Watch this clip from InfoWars featuring Harrison Smith discussing how the White House is planning to get rid of America’s remaining oil reserves before the midterms.
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