Spread & Containment
Profiting From Rising Fuel Prices
Investors Alley
Profiting From Rising Fuel Prices
Most of you are surely aware of the headlines blaring that retail gasoline prices in the United States…

Investors Alley
Profiting From Rising Fuel Prices
Most of you are surely aware of the headlines blaring that retail gasoline prices in the United States rose again and hit another all-time record, surpassing one set in March.
On May 10, the average cost of a retail gallon of gasoline hit $4.374, according to the American Automobile Association, surpassing the former record of $4.331. Since March 30, crude futures have lost about 7%, but gasoline futures are up 9.4%. In fact, they hit a record on May 6 of $3.7590 per gallon before selling off a bit over the next few days.
Why Prices Are Rising
Refinery closures due to both scheduled maintenance and unplanned upsets (Russian invasion of Ukraine) have boosted fuel prices.
The world has lost one million barrels of refining capacity and 1.5 million barrels of oil supply since the pandemic. This is an estimate given by Mike Jennings, CEO of HF Sinclair (DINO) in an earnings call on May 9.
“That’s 2.5% of world consumption…it’s a big number,” said Jennings.
He isn’t kidding. Worsening shortfalls of diesel, gasoline and jet fuel across the country point to a refining system stretched to its limits by both the robust post-pandemic recovery in fuel demand and the aforementioned loss of Russian supplies.
At this time of year, refiners normally prioritize gasoline output ahead of the summer driving season. However, this year is different. Refineries have had to increase distillate output to meet jet fuel and diesel demand in Europe and the United States, as sanctions on Russia curtailed its fuel exports.
Despite refiners’ efforts, diesel inventories in the U.S. are at their lowest levels since 2006 and prices at the pump are nearly $5.50 a gallon, a record high, according to the Energy Information Administration.
Plummeting diesel supplies are at the epicenter of the problem and why fuel prices are rising. Diesel fuels our country’s construction, heavy industry and food production industries as well our rail and trucking systems across the country.
Karim Fawaz, a director at S&P Commodities Insight, told the Financial Times there was little sign of fuel markets loosening, especially as increased travel buoys demand over the summer months.
He said, “You’re running at historically low inventories, with basically very limited spare refining capacity and you’re staring down potentially Europe phasing out another tranche of Russian diesel imports. It’s difficult to see how the system bounces back in the short term.”
The problem here in the U.S. is a direct result of the fact that there is little excess capacity in the system to lift fuel output and restock inventories. This is thanks to a wave of refinery closures during the pandemic, when demand collapsed and refining companies suffered heavy financial losses.
Refiners in Paradise
Conditions for the companies that refine crude oil are nearly ideal now and will stay that way for the foreseeable future. That means the ongoing surge in their profits will continue.
In a sign of the extreme tightness in fuel markets, the Gulf Coast 3:2:1 crack spread — essentially the amount a refiner gets for the fuel it sells above the price of crude it buys to make it and a sign of refiners’ profit margins — hit all-time highs of more $60 a barrel over the past week. The indicative 3-2-1 margin is based on the assumption a refinery produces two barrels of gasoline and one barrel of diesel from refining three barrels of crude.
Martijn Rats, an analyst at Morgan Stanley, wrote this in a recent note to clients: “The system is now behaving as though [refining] capacity has effectively run out. This is not easy to solve quickly, especially if demand recovers further. Margins have not just risen, but surged to unprecedented levels.”
These ideal conditions will likely last into 2023. That’s when more refining capacity is scheduled to come online in Asia and the Middle East.
Refining Investment
Refiners’ stock prices have surged on the prospects of many months of blockbuster profits. The S&P Refining & Marketing index is up nearly 50% this year, even as the broader market has fallen.
Mark Lashier, president of Phillips 66 (PSX), told investors in an earnings call on April 29 “We’re probably as constructive on refining as we’ve been in a long time.”
Many of these refining companies pay a decent dividend as well. For example, Phillips 66 has been slow and steady on increasing its dividend payout every year – from $2.18 annually in 2015 to $3.62 in 2021. The stock currently yields 4.15%, with an indicated payout of $3.68 this year.
Phillips 66 is a downstream energy company with assets in four segments: Refining, Marketing,
Chemicals, and Midstream. Its refining and marketing operations include 14 refineries with net crude
capacity of 2.2 million barrels per day. Its chemicals operations are conducted through a 50% interest in
Chevron Phillips Chemical Company, which has more than 33 billion pounds of net annual processing capacity. Its midstream operations are conducted through a 50% interest in DCP Midstream (DCP), and through the company’s controlling stake in Phillips 66 Partners.
The current state of the refining market was clearly visible in its latest earnings report. Phillips 66 reported a first quarter 2022 adjusted net profit of $595 million or $1.32 per share, up from an adjusted net loss of $509 million or $1.16 per share a year ago. The swing to an operating profit reflected strong performances in three of its four business segments, with particular strength in chemicals and refining. First-quarter revenue spiked 68% to $36.722 billion.
I like its diversified portfolio of businesses because its makes the company’s cash flow less volatile than that of most pure-play refiners.
That’s a big reason why PSX has a long history of returning excess cash to shareholders through buybacks and rising dividends. In April, the company repaid $1.45 billion in debt. As a result, it plans to resume stock repurchases that it had suspended in 2020.
With one of the highest distillate yields among its peers, Phillips 66 is well positioned for the long term since the growth outlook for distillates is better than for gasoline.
And with its policy is to invest about 60% of operating cash flow over time and return the rest to shareholders, this will likely translate to double-digit dividend growth for the next several years.
PSX is a buy on the recent weakness in energy stocks, anywhere in the $85 to $90 range.
2 Stocks Paying Dividends EVERY WEEK!
For the first time ever, I’ve found two stocks that are not paying dividends annually… not quarterly… not monthly… but weekly.
Every Week, one of these stocks will pay out a dividend. It’s a conservative fund based on fixed-income investments. It’s not one single company. Rather, it’s a collection of strong companies like Delta and Ford. Except, you won’t have to wait for quarterly dividends from them. Expect them weekly!
Want more conservative dividends? This second weekly payer also sends dividend checks out this Thursday. What’s great about them is it’s not a single stock. Rather, it’s a fund diversified across 300 strong companies such as JP Morgan and Procter & Gamble.
Profiting From Rising Fuel Prices
Tony Daltorio
Spread & Containment
“We Can’t Force The Human Body To Accept Foreign Genetic Code” Dr. McCullough On mRNA Technology
"We Can’t Force The Human Body To Accept Foreign Genetic Code” Dr. McCullough On mRNA Technology
Authored by Naveen Athrappully via The Epoch…

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),
Cardiologist Dr. Peter McCullough warned that messenger RNA (mRNA) vaccines inject “foreign genetic code” into human beings, which the body fails to break down or expel for a prolonged period of time.
Research on mRNA “has been going on for decades,” Dr. McCullough said during an Oct. 5 interview. The 2023 Nobel Prize for medicine was awarded to two scientists for making “messenger RNA long-lasting in the human body,” he said. “I mean, it has been tested in multiple applications … It's an absolute bust. It was just the worst idea ever to install the genetic code for a lethal protein without being able to shut it off. It wasn't the fact that it was rushed; it's just ill-conceived from the very beginning.”
“We can't force the human body to accept foreign genetic code and produce a foreign protein … Messenger RNA for vaccines is a completely failed concept. It’s a dangerous concept, and the U.S. government wasn't honest. They should have been honest. Trump should have come out and said, ‘Listen, it's on our website; our military's been working on this since 2012.’”
During a testimony at the European Parliament last month, Dr. McCullough said, “There's not a single study showing that the messenger RNA is broken down” in the human body once it is injected.
“There's not a study showing it leaves the body.” Since the vaccines are “made synthetically, they cannot be broken down.”
He added that the lethal protein from the [COVID-19] vaccines found in the human body after vaccination was found to be circulating “at least for six months, if not longer.”
In the case of seasonal jabs, that is, taking an injection or booster at the end of six months as recommended by the authorities, “there's another installation in more circulating potentially lethal protein.”
Scientist Drew Weissman, who won the 2023 Nobel Prize in Medicine for his role in developing mRNA technology, warned in a 2018 paper that not only did clinical trials of mRNA vaccines produce “more modest [results] in humans than was expected based on animal models,” but that the “side effects were not trivial.”
Dr. Mccullough’s comments come as the Gates Foundation is spending $40 million on countries in Africa and other economically backward nations to produce new mRNA vaccines in efforts to prevent diseases like tuberculosis and malaria.
Concealing a ‘Global Security Threat’
In the Steve Deace interview, Dr. McCullough said that the ineffectiveness of the technology was not unknown to the government since they’ve been testing it for nearly 40 years.
He referred to a February 2023 paper published in the British Medical Journal (BMJ), which cited that the U.S. government has been investing billions of dollars in developing messenger RNA technology since 1985.
The Defense Advanced Research Projects Agency (DARPA) began investing in mRNA tech in 2011. DARPA then launched the Pandemic Prevention Platform (P3) program in 2016 that sought to produce “relevant numbers of doses” against infections within 60 days of identifying them.
The ADEPT P3 was a program by the U.S. military “to end pandemics in 60 days.” There is no other technology “that our government has invested more in,” Dr. McCullough said.
Dr. McCullough cited another paper that stated there were “over 9,000 patents on messenger RNA. And all the patent assignees are big entities. At the top is Sanofi, then Cervavac, BioNTech, Moderna, and the U.S. government. No single person invented messenger RNA. Someone who comes up in 2021 and says, ‘You know I invented it’. That's impossible. This has been going on for decades.”
Dr. McCullough pointed out that the United States and China have been in “collaboration for years” in their research on infectious and lethal coronavirus.
However, officials like Anthony Fauci, the former head of the National Institutes of Allergy and Infectious Diseases (NIAID), Francis Collins, the former head of the National Institutes of Health (NIH), and “a whole cadre of scientists, they collaborated to conceal this global security threat.”
“They actually intentionally lied to the world and said the virus came out of nature. They knew it came out of the Wuhan lab,” he said, citing a research paper by Ralph Baric and Dr. Zhengli-Li Shi that was published in the Nature journal in 2015.
Dr. Zhengli-Li Shi is affiliated with the Wuhan Institute of Virology, while Mr. Baric is from the Department of Epidemiology, University of North Carolina at Chapel Hill.
“They said they created SARS-CoV-2 virus. They called it the Wuhan Institute of Virology 1 virus. That was the prototype SARS-CoV-2. So, that's in 2015. Instead of bringing Ralph Baric out [and asking] ‘Dr. Baric, how do we get ourselves out of this disaster,’ you masterminded this virus funded by the US.”
‘Pull All COVID-19 Vaccines Off the Market’
In his interview, Dr. McCullough made three recommendations. “I say number one, I've called in the US Senate [and] now the European Parliament [to] pull all COVID-19 vaccines off the market before anyone else is harmed.”
“Number two, US, EU and all westernized Nations [should] pull out of the WHO. They're not trustable. And number three, I'm following the World Council for Health. I am recommending a halt on all childhood vaccines, the entire vaccine schedule until this is clarified since messenger RNA is now on the schedule without any concerns for safety.

While some studies related to the safety of COVID-19 vaccines have shown the jabs to be safe, others have raised concerns about the safety of the shots.
A December 2022 study analyzed trials comparing vaccine recipients with individuals who did not receive a vaccine or were given a placebo.
It concluded that “compared to placebo, most vaccines reduce, or likely reduce, the proportion of participants with confirmed symptomatic COVID-19, and for some, there is high-certainty evidence that they reduce severe or critical disease.”
However, a June 2022 study that looked at mRNA vaccinations found that “Pfizer and Moderna mRNA COVID-19 vaccines were associated with an increased risk of serious adverse events of special interest (AESI).”
“The excess risk of serious adverse events of special interest surpassed the risk reduction for COVID-19 hospitalization relative to the placebo group in both Pfizer and Moderna trials.”
‘Shedding’ the Infection
During the interview, Mr. Deace asked about hearing issues that he and his colleague suffered and whether they had any ties with the vaccines. While he did not take a COVID-19 shot, the colleague was vaccinated. Mr. Deace asked if this was “further proof that basically the last few years Peter everybody was a lab rat whether you took the vaccine or not.”

“It's true, nearly all of us have been exposed to the Wuhan spike protein,” Dr. McCullough replied. “When I see patients in the office, we check antibodies against the spike protein. Invariably, they're elevated. Rarely, I'll find somebody who hasn't been exposed.”
Dr. McCullough pointed out that there are “clear-cut papers” showing individuals suffering hearing loss after taking COVID-19 jabs. “It's all related to the spike protein,” he said. mRNA vaccines work by instructing cells in the body to produce the spike protein found on the surface of the COVID-19 virus.
Once vaccinated, an individual’s muscle cells begin producing spike protein pieces, displaying them on cell surfaces, which end up triggering the immune system to create antibodies. When such an individual gets infected with the COVID-19 virus, these antibodies will then fight the virus.
Dr. McCullough warned that even people who have not received mRNA COVID-19 vaccines can eventually get affected by messenger RNA through a vaccinated individual via “shedding.”
“Shedding means that one has been exposed to the spike protein or to the messenger RNA from close contact with another individual. We know both of them can travel via exosomes which are small phospholipid packets that can be exhaled [via] breath, through sweat, [and] various forms of body fluid, typically you know very close contact.”
“There was a big project called the Eva project in the UK showing 78 percent of women who take a vaccine—they actually have menstrual abnormalities. And those who even didn't take a vaccine, they end up having menstrual abnormalities. There's been plenty of these reports that have occurred.”
Dr. McCullough cited an interview he did with scientist Helene Banoun, an expert on shedding, who believes such things “clearly happens, for sure, in people who've taken the vaccine within 30 days, close contact.”
“Now, two studies—one in the United States, one in Japan—[show] the messenger RNA comes through breast milk. The spike protein may be shedded potentially for a much longer duration of time. It's been shown in the human body now for months, maybe even years afterward. And that's the rationale for what our recent proposal to actually undergo spike protein detoxification.”
The cardiologist pointed out that “every signal” related to cardiovascular disease, neurologic disease, blood clots, immune disease, and cancer “is up.”
“There can be debates on why all these chronic diseases are up, all-cause mortality up in every single area of the world,” he said. “The two big exposures we've had are COVID-19 infection and now COVID-19 vaccines, and I think both mechanisms have led to this wave of disease.”
“I think more powerfully with the vaccines since the vaccines are largely genetic, they're given every six months, and they install the genetic code for the disease-promoting and lethal Wuhan spike protein.”
Government
Rent Control Is A Disaster – Don’t Let It Spread Across The Nation
Rent Control Is A Disaster – Don’t Let It Spread Across The Nation
Authored by Betsy McCaughey via The Epoch Times,
America’s renters -…

Authored by Betsy McCaughey via The Epoch Times,
America’s renters - more than one-third of the nation’s households - are in for trouble.
Left-wing politicians are demanding rent regulation from coast to coast. Wherever it is adopted, the result will be a disastrous reduction in the rental housing supply, leaving renters desperate for places to live.
New York is the poster child for the failures of rent regulation. The U.S. Supreme Court is currently mulling a challenge to the constitutionality of the city’s rent regime.
Whatever the justices decide, the public needs to consider less destructive, more targeted ways to help low-income people pay for housing. The court of public opinion needs to consider these facts.
Fact No. 1: Rent regulation isn’t targeted to the poor.
In New York, there’s no means test. What you need is luck or connections. The mean income of a rent-stabilized apartment dweller is $47,000, but census data show that tens of thousands of them earn more than $150,000 per year. Some occupants use what they’re saving on rent to pay for a weekend place in the Hamptons or New England.
The pols don’t object—a sure sign they’re calling for rent regulation to help themselves politically, not the poor.
In New York, 44 percent of rental apartments are regulated by the Rent Guidelines Board (RGB), established in 1969, which sets the maximum amount by which landlords are allowed to raise the rent. Those limits apply to all buildings of six or more units built before 1974.
In 2022, the RGB set the maximum rent hike at 3.25 percent on one-year leases and this year at 3 percent. Never mind that last year, fuel costs to heat the buildings soared by 19 percent and overall inflation hit 8.3 percent.
The decisions are political, not economic. Many Democratic politicians vilify building owners as “greedy landlords” and depict themselves as the champions of the downtrodden. It’s a scam.
Fact No. 2: Winners and losers.
The winners are the lucky few with rent-regulated apartments and the pols who count on an army of tenant activists to turn out at the polls. The losers are the 56 percent of renters who don’t score a regulated apartment and have to scour neighborhoods for an unregulated place that they can afford. They’re paying more.
Why? Because regulation causes some landlords to walk away, reducing the overall supply of apartments. The laws of supply and demand mean rents go up. New Yorkers in unregulated apartments are paying the highest rents in the United States for a one-bedroom apartment. They're the real victims, and they should be furious.
Yet the left-wing press pretends that rent control offers only benefits. The New Republic warns that the Supreme Court challenge threatens “laws that have benefitted the city’s tenants for generations.” Sorry, untrue—only some tenants, and not always the neediest.
It’s economic madness. The saner way to help those who need assistance paying rent is with a voucher. We offer the needy SNAP debit cards to help them pay for groceries. No one slaps price controls on grocery stores or designates certain stores as “regulated,” forcing them to sell at below cost.
Yet New York forces certain landlords to pay what should be a public cost shared by all, an argument made to the court.
Fact No. 3: The Marxist fantasy that rent regulation will help the poor is spreading across the United States and Europe as well.
Maine and Minnesota have enacted laws allowing municipalities to impose rent regulations. In November 2024, California voters will be asked to approve a proposition allowing local governments to add additional restrictions to the state’s existing rent caps.
The laws of supply and demand are international. Berlin froze rents in 2019, and the rental supply plummeted, according to the Ifo Institute, a think tank.
Yet London Mayor Sadiq Khan is calling for freezing rents for two years. London provides housing vouchers to the poor—a smarter approach—but when the city froze the voucher amounts during the COVID-19 pandemic, fewer apartments were available in the price range. The answer is to raise the voucher amount. Freezing rents will only make the shortage worse.
Ignore the demagogues. The evidence is in: Rent regulation is a political scam. There are better ways to help Americans afford a place to live.
Government
China’s Birth Rate Plummets 10% To Lowest On Record
China’s Birth Rate Plummets 10% To Lowest On Record
China’s birthrate fell 10% last year to its lowest level on record, a significant drop…

China's birthrate fell 10% last year to its lowest level on record, a significant drop in spite of extensive efforts by the CCP to encourage people to get busy.
The country had just 9.56 million births in 2022, the lowest figure since they began keeping records in 1949, according to a report by the National Health Commission.
The high costs of child care and education, growing unemployment and job insecurity as well as gender discrimination have all helped to deter many young couples from having more than one child or even having children at all. -NBC News
China's population also fell for the first time in six decades, dropping to 1.41 billion people - a demographic shift that's caused officials to worry that the country will 'get old before it gets rich' - with a slowing economy and declining tax receipts amid increases in government debt due to soaring health and welfare costs.
According to the report, the demographic downturn is largely thanks to China's one-child policy imposed between 1980 and 2015. Nearly 40% of Chinese babies last year were the second child of a married couple, while 15% were from families with three or more children.
The sharp decline in births comes despite Beijing's efforts to increase child care and provide other financial incentives. In May, President Xi Jinping presided over a panel to study the topic.
Not just China
As we noted in June, Japan's birth rate has also plummeted to a record low for the seventh straight year, with the number of babies born falling below 800,000 this year, health ministry data showed on June 2.
The number of newborns in Japan fell to 770,747 this year, down 40,875 from the previous year and the lowest since the country began record-keeping in 1899, Kyodo News reported, citing health ministry data.
Japan’s fertility rate—the average number of children born to a woman in her lifetime—fell from 1.30 in 2021 to 1.26 last year, equivalent to the previous low recorded in 2005. The number is far below the 2.07 rate necessary to sustain a stable population.
The decline in Japan’s birth rate is attributed to people delaying parenthood due to the economic impact brought on by the COVID-19 pandemic, as well as the prevailing trend among couples to delay marriage, according to the report.
The US birthrate has also been in decline, falling slightly in 2022 compared to 2021, with roughly 3.7 million babies born nationwide. It still hasn't recovered to pre-pandemic levels according to the CDC.
And as Mike Shedlock noted two years ago.
More via Mish Talk, worth a review:
The Pandemic Caused a Baby Bust, Not a Boom
Scientific American reports The Pandemic Caused a Baby Bust, Not a Boom
When the COVID pandemic led to widespread economic shutdowns and stay-at-home orders in the spring of 2020, many media outlets and pundits speculated this might lead to a baby boom. But it appears the opposite has happened: birth rates declined in many high-income countries amid the crisis, a new study shows.
Arnstein Aassve, a professor of social and political sciences at Bocconi University in Italy, and his colleagues looked at birth rates in 22 high-income countries, including the U.S., from 2016 through the beginning of 2021. They found that seven of these countries had statistically significant declines in birth rates in the final months of 2020 and first months of 2021, compared with the same period in previous years. Hungary, Italy, Spain and Portugal had some of the largest drops: reductions of 8.5, 9.1, 8.4 and 6.6 percent, respectively. The U.S. saw a decline of 3.8 percent, but this was not statistically significant—perhaps because the pandemic’s effects were more spread out in the country and because the study only had U.S. data through December 2020, Aassve says. The findings were published on Monday in the Proceedings of the National Academy of Sciences USA.
Birth rates fluctuate seasonally within a year, and many of the countries in the study had experienced falling rates for years before the pandemic. But the declines that began nine months after the World Health Organization declared a public health emergency on January 30, 2020, were even more stark. “We are very confident that the effect for those countries is real,” Aassve says. “Even though they might have had a bit of a mild downward trend [before], we’re pretty sure about the fact that there was an impact of the pandemic.”
Covid Accelerated the Existing Trend
Covid accelerated the already declining birth rates.
Given the 16-year lag between births and the civilian noninstitutional population coupled with the aging of the workforce there will be fewer and fewer workers supporting retired workers on Social Security.
Notice the relatively steep decline in the birth rate starting in 2008 and continuing through today.
That impact will start showing up in 2024 and last a minimum of 12 years.
How long depends on whether the birth rate picks up after Covid. I highly doubt the birth rate will pick up.
Deflationary and Inflationary Impacts
- Inflationary: Shortage of workers increases wage pressures
- Deflationary: Fewer workers support an increasing number of retirees
- Deflationary: Older workers need more assistance, buy fewer things, travel less.
- Deflationary: More government debt and deficits. Government spending has a negative impact on real GDP.
* * *
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