Gas Supply is Down and Prices Continue to Rise

Gas Supply is Down and Prices Continue to Rise

October 8, 2021

The world is currently experiencing an astronomical increase in natural gas prices as supply is down, and the United States is no exception. In fact, gas prices are over a dollar higher than this time last year. This has now become such a crisis that government is considering tapping into the nation’s oil reserve, something that has not been done since 2011.

Reuters Reports:

U.S. Energy Secretary Jennifer Granholm said on Wednesday that tapping the country’s emergency oil stash is being mulled by the administration to cool gasoline prices that have hit seven-year highs on higher demand as the coronavirus pandemic eases, according to a Financial Times report.

The SPR, held in caverns on the Texas and Louisiana coasts, currently holds about 617.8 million barrels of crude, according to the Energy Department, the lowest in about 18 years.

Unfortunately, the Biden administration’s attack on the oil and gas industry has made it difficult for them to produce and has caused wariness across the industry to increase production projects. The president of Latigo Petroleum discussed this issue with The New York Times:

“Everyone is very wary since it was just 15 or 16 months ago we had negative-$30-a-barrel oil prices,” said Kirk Edwards, president of Latigo Petroleum, which has interests in 2,000 oil and natural gas wells in Texas and Oklahoma. He was recalling a time of so little demand and storage capacity that some traders paid buyers to take oil off their hands.

If the drillers don’t increase production, fuel prices could stay high and even rise. That would present a political problem for Mr. Biden. Many Americans, especially lower-income families, are vulnerable to big swings in oil and gas prices. And while use of renewable energy and electric cars is growing, it remains too small to meaningfully offset the pain of higher gasoline and natural gas prices.

Goldman Sachs analysts say energy supplies could further tighten, potentially raising oil prices by $10 before the end of the year.

American families’ wallets will be facing a harsh winter this year. The Biden administration’s continued attacks on the oil and gas industry are having direct and negative impacts on hardworking Americans.