Thread on the Infrastructure Bill & Biden's asking OPEC to increase production
1- It is possible that the statement regarding OPEC is a routine one, which previous administrations had repeated multiple times.
2- But the timing makes us link it to the infrastructure bill.
#OOTT
1- It is possible that the statement regarding OPEC is a routine one, which previous administrations had repeated multiple times.
2- But the timing makes us link it to the infrastructure bill.
#OOTT
2- Economically, the infrastructure bill is inflationary. It increases the demand for almost everything, including petroleum products. Hence, it is logical to expect prices of these products to increase.
With inflation, the money dedicated to infrastructure will get less done!
With inflation, the money dedicated to infrastructure will get less done!
3- Politically, the last thing the Biden Administration wants is to give Republicans a platform to attack the infrastructure bill by focusing on inflation, and fuel prices in particular. Therefore, the objective is to fight inflation on all levels, including higher fuel prices
4- But there are 2 problems.
a- The problem is in refined products, not in crude. Therefore, Biden's problem should be addressed with refiners, not OPEC. Increasing crude oil exports may not translate into lower gasoline and diesel prices unless refineries increase runs. #OOTT
a- The problem is in refined products, not in crude. Therefore, Biden's problem should be addressed with refiners, not OPEC. Increasing crude oil exports may not translate into lower gasoline and diesel prices unless refineries increase runs. #OOTT
5- Refineries will not increase utilization unless the margins are high. Also, the US can import cheap gasoline from other countries if it is cheaper than making it in the US. Saudi Arabia can export gasoline instead of crude! Whoops! #Oil #OOTT #OPEC
6-Also, the Biden administration has to face crude oil price differentials.. and .. pay attention to this:👇 gasoline quality-price differentials + Gasoline quality islands!
That means the possibility of record gasoline prices for certain types of gasoline is pretty high. #OOTT
That means the possibility of record gasoline prices for certain types of gasoline is pretty high. #OOTT
7- Add to the above the impact of drought on ethanol and biofuel supplies in the US, Brazil & other places Wow! 🔥
Remember, all these problems have nothing to do with OPEC! They are manmade problems! Blame policymakers!
Remember, all these problems have nothing to do with OPEC! They are manmade problems! Blame policymakers!
7-
b- Why is the administration asking OPEC to increase oil production? Are they embarrassed to ask the US and Canadian oil producers?
Sure. Because the reply is ready: We will if you ALLOW us to drill. We will if you allow oil to flow in the pipelines!
b- Why is the administration asking OPEC to increase oil production? Are they embarrassed to ask the US and Canadian oil producers?
Sure. Because the reply is ready: We will if you ALLOW us to drill. We will if you allow oil to flow in the pipelines!
8- The bottom line is: Any way you look at it, it is NOT an OPEC problem! But again, asking OPEC to increase production and be more competitive could be just a routine.. the timing, in this case, is just a coincidence. #OOTT 
9- What you have read above is just the tip of the iceberg. I discuss the details and other points in my speaking tours.
Now think about this: what if all the above is NOT correct and is actually related to some surprises regarding Iran or another oil-producing country? see next
Now think about this: what if all the above is NOT correct and is actually related to some surprises regarding Iran or another oil-producing country? see next
10- Farfetched? Just look at the title of the official who made the request to OPEC to increase production.
Want me to speak at your event? Contact me!
Cheers
Want me to speak at your event? Contact me!
Cheers
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