Gas Prices On The Rise. Biden Shuts Down Keystone XL Pipeline

In data collected by GasBuddy and released on January 18th, it is reported the average gas price has risen for the second week in a row.

The national average has risen to 4.2 cents per gallon over the last week to $2.38 from data collected from 11 million individual price reports covering over 150,000 gas stations across the country.

The national average for diesel has risen 2.6 cents and the national average price is $2.62 per gallon.

Gas prices have jumped to yet another multi-month high as crude oil prices rise amidst perceived improvement in the COVID-19 pandemic, which continues to pump prices up as demand shows renewed signs of recovery.
In addition, with rumors swirling that President-elect Biden plans to cancel approval of the Keystone XL pipeline, which would cut off reliable Canadian oil to the U.S., oil prices may see additional pressure in the coming days. For now, the upward trend in gas prices may slow from the sharp rise in the last week, but motorists shouldn’t expect much of a break from rising gas prices, which now stand less than twenty cents from their year-ago levels.
Patrick DeHaan. Head of petroleum analysis for GasBuddy

West Texas Intermediate crude oil prices have risen to $52.29 per barrel. The previous week was $51.80.

Brent crude oil was down from the $55.32 to the $54.98 per barrel.

Pay with GasBuddy data showed U.S. gasoline demand rose slightly, some 1.1% last week versus the prior week, keeping market optimism in play.

From the report, “Last week’s report from the Energy Information Administration may have helped inspire some buying as well, with the agency reporting U.S. oil inventories logging a drop of 3.2 million barrels as refiners again ramped up operations.

“Gasoline inventories rose a whopping 4.4 million barrels while distillate inventories jumped a slightly larger 4.8 million barrels. Implied gasoline demand saw a mild increase of 91,000 barrels per day, rising to 7.53 million barrels, while so far in 2021 total gasoline demand was about 11% lower than the year ago period.

“Refinery utilization increased to 82% of capacity, while gasoline production fell to 7.5 million barrels per day. Overall, petroleum inventories were up 44 million barrels versus a year ago.”

GasBuddy reports that the average price of gas in a majority of states have risen overall.

Gas Price Trends

The most common U.S. gas price encountered by motorists was unchanged at $2.29 per gallon, followed by $2.19, $2.39 and $2.09.
The average cost at the priciest 10% of stations stands at $3.26 per gallon, up 8 cents from a week ago, while the lowest 10% average $2.00 per gallon, up 9 cents from a week ago.
The median U.S. price is $2.29 per gallon, up 5 cents from last week and about 9 cents lower than the national average.
The states with the lowest average prices: Louisiana ($2.06), Mississippi ($2.06) and Oklahoma ($2.07), while the highest priced states were California ($3.33), Hawaii ($3.24) and Washington ($2.80).

Biden Lays Off Keystone Pipeline Workers

It is no longer rumor as President Biden immediately canceled the Keystone XL Pipeline after taking office.

The Canadian provincial leader Jason Kennedy spoke with Martha MacCullum on Fox New’s The Story, and he was frustrated and disappointed with the move by Biden.

First of all, we congratulate President Biden on his inauguration and election and hope to have a close and strong relationship. We have the biggest bilateral trade relationship between Canada and the United States. But the biggest part of that trade is Canadian energy exports — largely from our province of Alberta. We have the third-largest oil reserves in the world. We ship about $100 billion of energy to the U.S. every year. Keystone XL would have meant a significant, safe, modern increase in that shipment.
It is very — it’s very frustrating that one of the first acts of a new president was I think, to disrespect one of America’s closest friends and allies.
Jason Kennedy

Kennedy urged the Biden administration to,

…Please take a half step back here, get into a conversation with your closest friend and ally, Canada, about how we can ensure a future for safe energy exports, continental energy independence and security between Canada and the U.S., while also taking very seriously climate policy and environmental policy.

There was a permit, legally approved [for the Keystone XL Pipeline]. Investments were made on that basis. But ultimately, Canadian energy continues to flow to the United States,” he said, reiterating hope for recompense from the U.S.
One thing we’re concerned about are political forces trying to decommission a number of other safe pipelines that have been operating for decades. So I would call on our friends in the United States to realize Canada is your closest friend and ally. We’re a safer source of energy to fuel your economy than OPEC dictatorships.

AUTHOR COMMENTARY

With Biden shutting down the Keystone XL Pipeline and killing off roughly 11,000 jobs with that one signature, expect to see the ripple effect of that, on top of the already steadily increasing gas prices.

Biden’s claim during his campaign was that he was going to tax the rich and make them pay their fair share. If you been around for just a little bit of time, then you would know that when someone says they are going to tax the rich, it means the last persons to be taxed are the rich. The rich very simply just move their wealth into different accounts, and spend more money on their companies and investments, and write-off their added charitable givings; so, they ultimately will get a refund or pay very little.

To make up for this, you have to tax the middle class and poverty stricken households. They will subtly increase taxes on different items across the states, and gas is one of those items.

Along with growing inflation across goods, expect gas prices to continually rise and inevitably hit prices similar to that of the Great Recession, and very possibly, worse: especially with an ever inflating dollar that will continue buying less.

It perhaps would be a wise decision to start stocking up on some gas reserves before prices get insane. I know I might consider doing that.

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