It's not an oil problem, it is a refining problem. WTI is down another $2.55 today. Oil has been at or around $100 barrel for extended periods of time again and again over the past 20 yrs. In 2008, it hit the all time high of $147/barrel. It stayed between $90 an $120 a barrel for most all of 2012 thru 2014. The problem today is a lack of refining capacity. Unfortunately, that problem is completely unsolvable in the short-term.
The problem we see today was caused by the 20 years of pushing this renewable/green energy BS here in the US and in Europe (wind, solar, hydrogen, ethanol, bio-mass and bio-gas, etc.) and more recently no fossil fuels mandates by 2030 and 2035. Instead of Big Oil investing in state of the art, higher capacity and more efficient refineries over the past 25 years, as the existing refineries continued to age out, nobody was willing to fight the regulatory battles and spend the billions in capital to attempt to build new ones. Why? Because our govt was telling them that fossil fuels were going to be regulated into oblivion and red-taping everyone to death. Nobody was willing to risk billions in capital, when that was the everyday drumbeat coming from Washington. There has not been a new greenfield refinery built in the United States since 1976. Now we are here and we are not going to build one in a few weeks. It's a five year process to build one from scratch, and that's only once you manage to get through all the governmental red tape.
Average diesel price today in China when converted to US dollars is $4.4982, and that is with all the global turmoil and oil issues in Russia and the middle east. Why, because they have the refining capacity. Enough to greatly influence world prices.
"China has the world's largest oil refining system, with a massive capacity of roughly 18.5 to 18.8 million barrels per day (mb/d), giving it formidable capability to produce diesel, gasoline, and jet fuel. Geopolitical Leverage: Massive spare and active capacity allows Beijing to modulate fuel exports and impact global diesel pricing."
Yeah, China would never do anything to attempt to influence elections or harm the US economy.
