Prices for natural gas notched a 14-year high amid low inventory reports and a fire at an LNG export facility.
Data Boos Natural Gas Prices, Wall Street Journal Thursday
Our analogy to the disastrous 1973-74 period continues unabated. Then we had steadily falling stock prices, lines at the gasoline station with rationing on odd/even license number days, and a huge political split over Watergate. At least this time we can still purchase gasoline though it is expensive. The real disaster occurs when supply is so restricted that rationing occurs.
Crude oil has about doubled from its low last December around $65 to the current $121. U.S. producers are reluctant to increase drilling and production for several reasons. The memory of the 2008 rise and fall ($140 to $35 in six months) still haunts those who binged on production in 2014 only to see prices collapse again. Team Biden asks for more production but once the mid-term elections pass and if prices do decline, the War on Fossil Fuels will begin again. Oil and gas investors seem to prefer share buy backs and dividends to risky ventures during triple digit oil prices.
In the same time period unleaded gasoline futures have soared from $2.00 to $4.20. Last weekend in the Wall Street Journal two females attempted driving an electric car from New Orleans to Chicago and back. The results were a disaster. The car took longer to re-charge than advertised. They encountered long lines and broken or slow charging stations at every promised stop. The EV enthusiasts are way ahead of reality. And the electric grid that may or may not support our air conditioners this summer is surely not capable of such demand.
Reports of the death of Exxon Mobil and the Board shake-up seem overblown. Again from last December to now, the stock has soared from $60 to $102. Energy service has likewise rebounded.
The ultimate negative human mood is war. Wars usually start amid economic hard times. Putin launched the Ukraine invasion February 24 as the Russian Trading System Index fell from 1,500 to 600, the lowest since 2008. Likewise our NASD had fallen from 16,000 to 12,500 since its November high.
