As Gas Prices Rise Democrats See Possibilities
By: Diane Sori / The Patriot Factor / Right Side Patriots on American Political Radio
"Politicians can say whatever they want about how much control they think they have on oil and gas prices, but they are just little swarms of market mosquitoes in the context of the massiveness of the overall set of oil markets."
- Paul Sullivan, economics professor at National Defense University and adjunct at Georgetown University
Let's start by saying our economy is booming; unemployment is at 3.8% the lowest level since early 2000 and the dot.com boom; the Tax Cuts and Jobs Act of 2017 has workers seeing more monies in their weekly paychecks; the much-hated 'individual mandate' of ObamaCare is history; border security is now a top priority with ICE making more arrests then we've seen in years; and an important summit with North Korea happens next week...a summit that if successful could help set the doomsday clock back a bit....with a possible U.S.-Russia summit also on the horizon.
Simply, Donald Trump's first 500+ days in office has proven to be a success, and anyone who says otherwise never will give Trump credit for anything positive he's done.
However, with the important midterm elections looming ever larger there is one issue that must be addressed yet it seems to be swept under the rug, and it's the very thing Democrats are starting to latch onto that could well turn the expected red wave....blue. And if that happens...if Republicans lose control of the House...it will just about guarantee a Trump impeachment vote.
So what is this issue and why is it so critical? It's the nationwide rise in gas prices...a rise in some areas of the country that is high enough to almost negate the extra monies folks have been seeing in their paychecks thanks to Trump's tax cut plan. In other words the middle class...the working class...are getting hit hard in their pocketbooks yet again. And with the current $62 per barrel of oil...with that number being projected to possibly increase to $68 per barrel (with some experts saying it could go as high as $80 per barrel) by summer's end...our reality at the pumps through at least the end of 2018 is not a pretty one...meaning this issue must be addressed post-haste or it will come back to haunt at the midterm election.
First a few facts: it's being projected that gas prices will average $2.90 per gallon for regular gas...with the price of high test being much higher something the media seems to ignore...through at least the end of September if not longer...with even higher prices in certain areas of the country. And $2.90 per gallon of regular is indeed a large price increase considering that in 2017 the average price of regular gasoline was $2.41 per gallon, which has led the Energy Information Administration to project that the price could jump even higher...maybe even inching upward of $4 per gallon by year's end. Blaming it on President Trump pulling us out of the Iranian nuclear deal, these folks are projecting that the glut of Iranian crude oil that flooded the overseas markets when sanctions were lifted will now be cut back as new sanctions settle into place, thus seeing Iran's oil exports diminishing by between 200,000 and 600,000 barrels per day.
Remember, a spike in gas prices usually happens as refiners work off stocks of fuel blended for winter months and start to blend specially formulated, cleaner burning, but more expensive fuels for the summer months...the peak driving time. And it's not just the ingredients in the summer blends that cost more, but thanks to the E.P.A. refiners must produce more than 20 different summer blends, which must then be transported to specific regions in specific volumes at specific times, adding higher costs to distribution on top of the higher costs of production. And with crude oil prices rising at the same time, it costs refiners more to buy the crude needed to make the summer formulated gasoline blends...a vicious cycle where the consumer...as always...must pay the price in the end.
And with everything boiling down to high crude oil prices...OPEC literally holds us over the gas barrel...as oil itself accounts for a whopping 72 percent of the price of gasoline with the remaining 28 percent coming from increasing distribution costs, refining costs, and plant maintenance fees. And the later translates into higher taxes being tacked on to help cover said costs...meaning that whenever crude oil prices rise so does gas taxes which together raises the price at the pump.
So our dependency on Arab oil...our dependency on OPEC...screws us yet again...as does but to a much lesser degree Venezuela's drastic cutback on its oil exports due to its own internal economic problems.
And while we sadly remain dependent on Arab oil...a dependency they use to their advantage when setting per barrel prices...know there are other entities at work as well that are causing this latest price increase at the pump. Enter center stage the commodities traders who buy oil and gasoline at the commodities futures markets...markets where company buyers speculate what the price of gas or oil will be in the future allowing them to buy gasoline contracts for future delivery at a set agreed-upon price. But the fact is that most of these buyers have little to no interest in taking ownership of said gasoline, instead choosing to sell their purchased contract for a profit, which in turn raises the price at the pump...and we get screwed again.
And let's not forget that gas prices and oil contracts are decided in dollars which allows gas prices to rise when the value of the dollar declines. Remember, between 2012 and 2014 oil prices rose when the dollar lost 40 percent of its value, but oil prices fell in 2015 and 2016 because a strong U.S. dollar allowed OPEC members to make more money while keeping supply constant. And right now, unfortunately, the U.S. dollar decreased 0.1400 or 0.15% to 93.8800 on Tuesday June 5th from the previous released number of 94.0200, and while it's a small decrease it's enough of a decrease to directly affect prices at the pump.
So where does rising gas prices leave us in regards to the midterm election...with the blame game of course. And we all know Democrats relish in saying...with the media reporting of course...that gas prices surged 50-cents-per-gallon since Trump took office. But what they both willingly forget is that it was Obama's and his cohorts misguided policies that set the stage for the now being seen increase at the pumps.
Refusing to admit that it's Democrats who have for years tried to permanently enforce a number of gasoline price increases through the initiating of various tax hikes...like Obama's Carbon Tax, Nancy Pelosi's wanting to double the federal gasoline tax, and with California Democrats successfully pushing through a 12-cent-per-gallon hike in the state's gas tax...now sees the Senate Minority Leader Chuck Schumer actually saying it's, “President Trump’s reckless decision to pull out of the Iran deal (that) has led to higher oil prices,” and that, “These higher oil prices are translating directly to soaring gas prices, something we know hurts middle-and lower-income people.”
NO...Chuckie...it's you and your fellow Democratic ilk who have caused the problems we are seeing today at the pump.
Ignoring the all-important fact that while U.S. presidents have little if any power to set global oil prices...prices that are for the most part driven either up or down by the simple economic principal of supply and demand...the taxes Democrat leaders and their party so love to impose on 'We the People' do help jack the price at the pump up. And with OPEC now cutting oil production they're able to raise the per barrel price as countries like China are demanding more and more oil...the above stated supply and demand as well as price manipulation in action.
In other words, the rising prices have absolutely nothing to do with President Trump or his pulling us out of the nuclear deal from hell. And Chuck Schumer also forgets that as per my previously stated change in the gasoline formulas required for summer driving...required thanks to the Democrats and their wacko environmentalist cohorts initiating even more totally useless E.P.A. air quality regulations...that gas prices indeed do go up every year at this time but do tend to settle back down come the fall.
And if truth be told, if it wasn't for the huge increase in U.S. oil production thanks to the so-called “fracking revolution” and Trump's support and encouragement of fracking, the prices would be going up even higher than they already are...something Democrats dare not say. And also something they dare not say is that last year under President Trump we became the world's largest producer of oil and natural gas, and we're on track to become the world's top oil producer this year as well...if only we could keep all that oil of ours here...oil exporting be damned.
So knowing all this what is Chuck Schumer's solution to the 'supposed' but so untrue Trump caused rise in gas prices? In a letter written in conjunction with three fellow Democrat senators, Schumer asked President Trump to “pressure OPEC” into increasing the world's oil supplies. Saying that, “The current run up in world oil prices is effectively a tax on every American family’s discretionary budget...” what Schumer and the Democrats forget is that 'We the People' do not want to pressure OPEC into increasing anything...what we want and need is to increase “drill baby drill” right here in the U.S. along with increasing fracking to completely cut our dependency on Arab oil...something the islamic-condoning Democrats absolutely do not want to do.
But as for the current price increase possibly affected the November midterms to such an extent that it could turn the 'red' wave 'blue'...what Trump needs to do is “cut them off at the pass”...so to speak...by getting those pump prices down. And while the price at the pump is but one issue that's on voter's minds, it's an important issue as it can wipe out all the monetary gains garnered from last year’s tax cuts...a possibility the Democrats will surely use against all Republican candidates running.
So how can President Trump get the price at the pump down in the short run? With most fixes even “drill baby drill” and fracking being long term fixes...the only way to get the price down now is by tapping into the Strategic Petroleum Reserve...an emergency stockpile of more than 700 million barrels of crude oil stored along the U.S. Gulf Coast. And while most experts agree that these emergency reserves should only be used for emergencies and not as temporary relief to what is a market-driven problem, releasing even small amounts does lower pump prices. One case in point, President George W. Bush tapped into the reserves to a tune of a mere 21 million barrels (out of the above stated 700 million barrels) in the aftermath of Hurricane Katrina, which helped to lower gas prices 10 to 15 percent across the board...a big help to the average consumer.
So if President Bush can do it so can President Trump while still having more than enough petroleum in reserve to handle any and all emergencies that might arise. And besides, if Democrats get to successfully use the rise in gas prices that have occurred on Trump's watch as the reason the middle class lost any monetary gains garnered from the Trump tax cuts, it will surely make it harder if not impossible for congressional Republicans to place their reelection chances on touting the tax breaks.
And if Democrats have even a remote chance of taking back the House that's reason enough to release some reserves to get and keep gas prices down, especially since Democrat experts are claiming that gas prices are expected to come down early next year after this critical election...how convenient is that.
But whether President Trump acts on this or not, what must never be forgotten is that only when we control both our own oil destiny and energy needs...can we really control the price at the pumps no matter whom the president might be.
Copyright @ 2018 Diane Sori / The Patriot Factor / All Rights Reserved.
For more political commentary please visit my RIGHT SIDE PATRIOTS partner Craig Andresen's blog The National Patriot to read his latest article Immunity for McCabe? Let the Canary Sing
RIGHT SIDE PATRIOTS...LIVE!
Today, Friday, June 8th from 7 to 9pm EST on American Political Radio, RIGHT SIDE PATRIOTS Craig Andresen and Diane Sori discuss 'As Gas Prices Rise Democrats See Possibilities; 'Immunity for McCabe? Let the Canary Sing'; and important news of the day.
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