MW 'Hate to say it, but we need to increase oil & gas output immediately,' says Elon Musk, as Ukraine crisis jolts U.S. crude to 2008 high
By Mark DeCambre
'Extraordinary times demand extraordinary measures,' says the CEO of electric-vehicle maker Tesla
It is an unusual stance for an EV-vehicle maker.
Tesla Inc. $(TSLA)$ Chief Executive Elon Musk says the U.S. needs to immediately increase production of oil and gas, in a late-Friday tweet, which runs against the grain of the electric-vehicle maker's own green-energy business initiatives.
"Hate to say it, but we need to increase oil & gas output immediately," Musk tweeted Friday. "Extraordinary times demand extraordinary measures," he said.
Musk's remarks comes as U.S. benchmark crude oil on the New York Mercantile Exchange settled at the highest values since 2008, posting the biggest weekly dollar gain on record, according to Dow Jones Market Data.
April West Texas Intermediate crude futures 7.4%, to settle at $115.68 a barrel, the highest finish since September 2008. For the week, prices based on the front-month contract, rose $24.09, or 26.3%, marking the sharpest dollar gain on record, based on data going back to April 1983.
Higher crude prices also eventually translate to higher gasoline prices for average Americans.
On top of that, April natural gas rose 6.2% to $5.016 per million British thermal units, and booked a 12.2% weekly gain.
The surge in commodities such as crude and natgas comes after Russia's invasion of Ukraine that began on Feb. 24.
Russia is a major producer of crude and natgas and sanctions levied on the Kremlin in response to its unprovoked attack on Kyiv have rippled through global markets.
In theory, the run-up in prices for oil is likely to help EV maker Tesla in the longer run as the cost of gasoline rises but the Russian invasion has drawn widespread criticism from the international community, with many enacting a de facto embargo of Russian crude.
Tesla closed down 0.1% Friday but was one of the few companies to end sharply higher on the week, up 3.5%, even as the Dow Jones Industrial Average , the Nasdaq Composite Index and the S&P 500 index closed lower for the week.
Earlier this week, the U.S. and more than two dozen major oil-consuming nations said they would release 60 million barrels of crude from emergency stockpiles to quell the surge in crude prices caused by the Ukraine crisis.
However, the drawdown is considered a drop in the bucket, given that global oil demand is estimated at 100 million barrels a day and Russia's oil production was at about 10.04 million barrels a day in January of 2022.
Concerns about the high price of crude also come amid persistent concerns about out-of-control inflation that was already dogging global economies in the aftermath of the COVID pandemic, amid supply-chain bottlenecks and labor shortages.
Some congressional GOP lawmakers have been suggesting that drilling more traditional energy sources, such as oil and natural gas, on U.S. land and water is the key to energy independence and geopolitical security, especially while the Russian crisis continues.
In a letter to President Biden sent Wednesday, every Republican member of the Senate Committee on Energy and Natural Resources, led by ranking member Sen. John Barrasso of Wyoming, urged the administration to rethink U.S. energy policy.
-Mark DeCambre
$(END)$ Dow Jones Newswires
March 04, 2022 20:23 ET (01:23 GMT)
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