After agreeing not to support any new fossil fuel investments with public dollars after 2022, the G-7 has backtracked and decided to facilitate development of liquified natural gas (LNG) infrastructure. The G-7 provides a forum for leaders of the seven nations with the largest developed economies (as well as the European Union as a non-enumerated member) to discuss key issues and policies. Although this action is regarded as quite controversial by many, it's the right move at a critical time.
The European Union (EU) has announced a partial embargo on Russian oil in response to the invasion of Ukraine. By yearend, about 90% of Russian oil import volumes could be affected. It's a major blow to Moscow, which relies on oil and natural gas sales for economic sustainability.
The number of oil and natural gas drilling permits issued by the Texas Railroad Commission reached an all-time high in March, at over 1,100. Hundreds of companies of all sizes are jumping into the fray. Activity is picking up across the state, with the Permian Basin reportedly seeing over 900 horizontal permits.
Recently, there has been much focus on the "petrodollar" and whether it will continue as the currency of choice in the oil market. China and Saudi Arabia have discussed shifting away from it, a move that some worry will end the dollar's dominance in world markets; others seem to think it would be the end of life as know it. Let me put your mind at ease.
Gasoline prices have soared, topping $4 per gallon in most areas. The increase has been rapid, and with inflation in almost everything else in family budgets, the additional costs are difficult to absorb. They are also very visible; we see the signs constantly.
Oil prices are touching an altitude not seen since the spike in summer 2008, pushing gasoline prices into uncharted territory and raising other costs in their wake. The situation in Ukraine and efforts by financial markets to predict it are driving the immediate spurt in prices, but even before Russia invaded, prices were trending upward as the global economy rebounded from COVID-19 and demand rose faster than supply.