US Oil Producers Fail to Produce

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Originally Posted by Seran

2. Umm, no? The IEA treaty requires it's member countries to keep 90 days worth of NET imports within the reserve. The US is one of 6 IEA member countries who is a NET EXPORTER and not required by treaty to hold stocks. The coordinated release of oil was a massive boon to industry and our country, and the sale was actually as much an EXCHANGE for FUTURE DELIVERIES as it was a sale. There is no legally mandated timeframe for stocks to be returned to the SPR. According to a May 2022 report, the average price for the oil within the SPR was $29.70 per barrel.

3. While you're correct that wage growth CAN result in COST-PUSH inflation, corporations CHOOSE when/if those increases are pushed off to customers. For example, Taco Bell has increased it's nationwide wages north of $14.00 per hour, yet their menu prices have scarcely changed despite that amount vastly exceeding minimum wage in areas. This is an example of a corporation allowing it's PROFITS TO SHRINK in order to preserve demand.

On the flipside, Big Oil on average produces oil at an average cost of $35 per barrel. While it resells at $117 per barrel. For those Big Oil conglomerates who also have refining capacity, they refine and resale the products at the equivalent profit of $155 - $275 PER BARREL of oil just at the wholesale rate. Big Oil collectively made the choice to increase their prices WELL AND BEYOND what the traditional profit margin is for oil distillates and are raking in RECORD BREAKING PROFITS.

Get your facts straight.

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I'm just going to skip the whole oil thing, since you are just regurgitating NYT and White House press releases.

However, let's use your Taco Bell example and expand a bit, since you like to grab only the pieces of the equation that still yield a result in your favor. In the rising rate, tighter lending environment that we now find ourselves in, Taco Bell through these measures has left themselves only one option to retain profitability once demand destruction occurs. Since they will no longer have the option of raising prices, they can only cut their largest expense, being that costly labor. The system contracts, unemployment rises, and inflation moderates. These are the very mechanisms that you seem to be aware of, but politics clouds your thinking when applying them to the energy sector.

Seems the Biden administration has poisoned the well enough here that it's now willing to travel to beg the Saudis for a political bailout. I can only imagine what that will cost. Assuming anyone even shows up at the airport to greet him.

https://www.reuters.com/markets/comm...87-2022-05-16/

"U.S. Strategic Petroleum Reserve drops to lowest level since 1987"

"President Joe Biden in March announced the largest release ever from the U.S. emergency oil reserve at 1 million barrels per day (bpd) of crude oil for six months from the reserve in an attempt to bring down gasoline prices that have soared during Russia's war with Ukraine."

"Before that, the United States had committed to release 30 million barrels of SPR oil in March and pledged in November to release 50 million barrels from SPR."

It's not about Russia - it's about Bidens policies.

"The 180 million-barrel release is equivalent to about two days of global demand, and was the third time Washington had tapped the SPR in the six months prior."

Before Russia. They were already using stockpiles to try and hide their policy failures.

"At least three vessels carrying crude oil from U.S. emergency stockpiles sailed for Europe in April as refiners there scrambled to replace Russian crude supplies, according to U.S. Customs data, ship tracking, and an industry source."

He's not using the oil to ensure US energy stability, he's sending it overseas.


So do that math for me? Russia sees largest sales of oil/gas ever... meanwhile we're releasing large portions of our strategic reserve and it's at it's lowest point in over 30 year... all while Biden allowed Russia to invade Ukraine... while overseeing the largest rise in inflation in over 40+ years... while halting, stopping, or over-regulating energy production in the United States... as he prepares to go to Saudi Arabia to beg for oil/gas increases from them... in a region of the world that Trump had tried to get us out of, and Biden puts us right back into...

Who's the Russian shill again?

https://tradingeconomics.com/united-...icipation-rate

In addition... all their claims about the economy are utter bullshit.. they haven't "created" any jobs... people just went back to work... their policies are actually hindering actual growth...

The labor participation rate is still over 1% lower than it was under Trump.

Until such time as that metric returns to that level, and Biden's policies actually "create" something... then it's all for nothing.

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Originally Posted by Furryrat

I'm just going to skip the whole oil thing, since you are just regurgitating NYT and White House press releases.

However, let's use your Taco Bell example and expand a bit, since you like to grab only the pieces of the equation that still yield a result in your favor. In the rising rate, tighter lending environment that we now find ourselves in, Taco Bell through these measures has left themselves only one option to retain profitability once demand destruction occurs. Since they will no longer have the option of raising prices, they can only cut their largest expense, being that costly labor. The system contracts, unemployment rises, and inflation moderates. These are the very mechanisms that you seem to be aware of, but politics clouds your thinking when applying them to the energy sector.

Seems the Biden administration has poisoned the well enough here that it's now willing to travel to beg the Saudis for a political bailout. I can only imagine what that will cost. Assuming anyone even shows up at the airport to greet him.

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You're arguing, unsuccessfully might I add, that Taco Bell who has been in the top ten highest grossing and revenue chains for decades, isn't running their business properly. Uh huh.

What you mean is you've got nothing substantive to add after having your argument was picked apart.

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Originally Posted by Shaps

Who's the Russian shill again?

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You.

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Originally Posted by Seran

You're arguing, unsuccessfully might I add, that Taco Bell who has been in the top ten highest grossing and revenue chains for decades, isn't running their business properly. Uh huh.

What you mean is you've got nothing substantive to add after having your argument was picked apart.

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I'm sorry that you think this was an argument. What I was doing was pointing out the fact that you have no real understanding of any topic being addressed in this thread.

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Originally Posted by Seran

Stock market extended it's recovery

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How's this recovery going today, by the way?

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Originally Posted by Seran

Stock market extended it's recovery, while oil saw a significant drop down to $115 a barrel following Powell's announced it's 75 basis point increase of the benchmark interest rate. Meanwhile, Biden announced a further stabilization of the domestic oil situation with further organized SPR releases. Less liquidity in the market and the price of oil suffers as traders are forced to pare increase costs for their unscrupulous trades. Odds of a recession? Up. Stagflation? Our current way of life as a result of a /very/ healthy jobs market, combined with wage growth and inflation resulting energy prices getting retarded due to Putin's invasion of Ukraine.

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https://i.imgur.com/cgJ9yCK.jpg

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Originally Posted by Seran

while oil saw a significant drop down to $115 a barrel

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Remember when you told everyone they had to kiss Biden's hairy ass because oil dropped down to like 80 dollars a barrel from 80.10 a barrel?

Now that oil is 45% higher now than it was then, you still want us to thank Biden for "saving" us money?

This is like the Democrats' new thing: make the price of everything sky rocket then when it drops 1% off of the new highs tell everyone you have Democrats to thank for the new lower price! It's actually a genius strategy to use on absolute worthless shit stains such as Seran.

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Originally Posted by Seran

You're arguing, unsuccessfully might I add, that Taco Bell who has been in the top ten highest grossing and revenue chains for decades, isn't running their business properly. Uh huh.

What you mean is you've got nothing substantive to add after having your argument was picked apart.

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And just to finish it off, Taco Bell is just a brand owned and operated by Yum! brands, a spinoff from PepsiCo in the late 90s, which also owns KFC and Pizza Hut. Yum! Brands (Stock ticker YUM, down ~30% this year) is the publicly traded entity and has come up short the last 2 quarters due to significant margin compression as a result of these increased food, freight, and labor costs. As I stated, and these are not 'arguments', when demand decreases, they can only maintain profitability by cutting costs in one of these three areas. Labor is the only one that they have direct control over, and being good corporate citizens by running into the red to keep people employed is not a viable path for a publicly traded company.

All that aside, I like Yum! Brands as an investment (when the smoke clears and a bottom is found). Taco Bell and KFC are great, but ever since I recovered from covid, that damn original recipe just doesn't taste the same to me.

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Originally Posted by Tgo01

Remember when you told everyone they had to kiss Biden's hairy ass because oil dropped down to like 80 dollars a barrel from 80.10 a barrel?

Now that oil is 45% higher now than it was then, you still want us to thank Biden for "saving" us money?

This is like the Democrats' new thing: make the price of everything sky rocket then when it drops 1% off of the new highs tell everyone you have Democrats to thank for the new lower price! It's actually a genius strategy to use on absolute worthless shit stains such as Seran.

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Just like how Seran follows the same "We shut down the country and put everyone out of a job, but now that everyone is finally going back to work, look how many jobs we created!!!!!" logic.

It's because he's a retard that doesn't understand words or numbers outside of his echo chamber of failure and retardedness.