Cartoon Of the Week

The price of gasoline in the United States has been on a steady increase since January 2016. The President of the United States is now trying really hard to lower oil prices, and America's gasoline prices, before mid-term elections in November... but its a damn confusing effort, let me tell 'ya.

Mr.Trump is on the record as saying that America will "dominate the entire world with cheap, limitless supplies of shale oil and natural gas exports"... but thru trade wars and tariffs, on steel for instance, he is raising the cost of shale development in America and helping to create bad transportation bottlenecks. Reuters predicts market deducts for oil in the Permian could rise to -$25 per BO in 2019.

Mexico, a major source of natural gas exports from the Permian Basin, is pissed off about steel tariffs (and immigration issues) and does not want much more American natural gas. Canada, another major source of steel exports to the US, and a significant source for LTO exports from the US, is pissed off about tariffs and is also starting to limit US LTO imports. China, yet another source for US shale oil, is really pissed off about trade wars and its refiners are saying no more American LTO. This week, in a moment of natural gas market clarity, the President started chiding Germany

into buying American LNG, for 5 times the cost of Russian gas, because our neighbors right next door won't, and we have GOT to get rid some of the stuff...instead of flaring it.

You'd think if the President needed lower gasoline prices he would ask the mighty US shale oil industry to increase its production and "unleash some American energy dominance" on ourselves...that's a big win-win for our country, right? Sure it is. Instead he is begging OPEC and Russia to increase its production to lower oil prices.

Hang on, there's more...at the same time Mr. Trump is groveling OPEC for more oil, US sanctions of Iranian oil are in full swing and that is taking lots of oil off the worldwide market.

So, the price of oil is now as high, or higher, than when this confusing bunch of hooey started months ago and November is just around the corner. Plan C is to drain the Strategic Petroleum Reserve to lower the price of oil, and gasoline, to help Republicans (which I are one!) maintain vital control of the House in November. The SPR, however, is America's oil savings account, and that is a piss poor idea.

I'd ask for a program to follow this mess, but there is no program. One thing is clear, for the US shale oil industry... costs are going up, the worldwide market for American LTO exports is eroding...and our President is hell bent on much lower oil prices. The LAST thing the shale oil industry needs is lower oil prices; over the next 12 months $80B of shale oil debt is maturing, in desperate need of refinancing, and interest rates are going up. If you are in the shale oil business, with friends like Mr. Trump, who needs enemies?