Agua Dulce: $528 per barrel
Do I have your attention?
Sure, the price of natural gas didn’t
stay there, but it
went there. I use this extreme example to illustrate an important point. Fossil fuels are hugely inelastic commodities. Shortages send prices soaring because they are
needed and there are not yet fungible substitutes. Society might hate fossil fuels, it might even hate them for very good reasons, but society is trapped in its need for fossil fuels, at least for the time being.
We can’t escape fossil fuels without
significantly higher prices. Higher prices will level the playing field for alternative technologies by making them more competitive. Higher prices will spur significant investment in new energy R&D. Higher prices will also be the only way to motivate society to cut fossil fuel use. Said another way, fossil fuels are
Two and a half million barrels per day of oil coming into the global markets from Iran is certainly going to weigh on oil prices over time, but there’s reason to believe that prices will fall sooner than expected
Subscribe today to the Washington Examiner magazine and get Washington Briefing: politics and policy stories that will keep you up to date with what s going on in Washington. SUBSCRIBE NOW: Just $1.00 an issue!
Oil prices hit their highest level in more than two years as OPEC+ agreed to maintain its production cut plans while demand projections continue to improve.
- The average retail price for gasoline in the U.S. jumped above $3 per gallon last week, the highest price since 2014.
- Memorial Day travel is expected to be 50% higher than the same weekend in 2020.
- California saw the highest prices at over $4 per gallon, while Texas saw the lowest at $2.72.
Market Movers
Pembina Pipeline (TSE: PPL) will acquire Inter Pipeline (TSE: IPL) in an $8.3 billion all-stock deal, creating one of the largest pipeline companies in Canada.