Trump is no doubt banking on drill baby drill. When oil and gas starts flowing from places like ANWAR, more offshore sites, and government lands in the interior, that will drive prices down at the pump, which will, in turn, create downward pressure on commodities. Having said that, all of that better take place before the midterms, or, I agree, Trump will be a lame duck much sooner than he would like.
The problems with that theory are that we are already at record high domestic oil production and cheap oil isn’t the answer to everything. Plus, it’s going to be difficult to maintain high production because fracking wells generate a lot of oil initially but are quickly played out.
Ultimately, prices are what they are currently even with very high production because we also have very high demand.
A recession could curb demand and lower energy prices, but that won’t fix food prices.
WSJ from today: Canadian heavy crude can't be easily replaced in the US market by US crude (which is generally a different grade), and the main imported alternatives are from... Mexico and Colombia
Trump is no doubt banking on drill baby drill. When oil and gas starts flowing from places like ANWAR, more offshore sites, and government lands in the interior, that will drive prices down at the pump, which will, in turn, create downward pressure on commodities. Having said that, all of that better take place before the midterms, or, I agree, Trump will be a lame duck much sooner than he would like.
The problems with that theory are that we are already at record high domestic oil production and cheap oil isn’t the answer to everything. Plus, it’s going to be difficult to maintain high production because fracking wells generate a lot of oil initially but are quickly played out.
Ultimately, prices are what they are currently even with very high production because we also have very high demand.
A recession could curb demand and lower energy prices, but that won’t fix food prices.
If you dig into it, demand is basically at 2015 levels and every extra drop of oil pumped since that time has gone to export.
Somewhat decent chart showing just how flat oil consumption has been: https://www.statista.com/statistics/282716/oil-consumption-in-the-us-per-day/
WSJ from today: Canadian heavy crude can't be easily replaced in the US market by US crude (which is generally a different grade), and the main imported alternatives are from... Mexico and Colombia