Things that made you Facepalm today (Political Version)

[Tgo01]

You're missing a key thing, what if the companies artificially reduce the supply to earn more for each gallon and earn record profits.

Right. Like oil companies all over the world aren't looking at 130+ dollars per barrel and drooling and wouldn't just love to sell more oil at that price. That's not the way the real world works.

[Parkbandit]

Your retort is that Donald Dump who ran on the promise of draining the swamp and making things better for the poor and middle? As soon as he got in office, he did the exact opposite with slashing taxes for them wealthiest and corporations, cutting middle class supporting tax benefits and programs. The dude is practically a nominee to be the Merriam Webster definition of political corruption.

Exposing the foes of democracy, clearing out the rot in both Republican and Democratic parties should be the priority for /everyone/

Tell us you don't have a job without telling us you are unemployable...

[Parkbandit]

It's good to know the Republicans here are still capable of blaming the house for catching fire, rather than the person who set the fire. I was beginning to think you extremists were developing rationality. Guess not!

I'm not blaming the White House.. I'm blaming President Biden and the Democrat controlled House and Senate.

[drauz]

Right. Like oil companies all over the world aren't looking at 130+ dollars per barrel and drooling and wouldn't just love to sell more oil at that price. That's not the way the real world works.

Yeah... but then the demand wouldn't be as great and the price would drop... Do you understand how supply and demand work?

[Gelston]

Yeah... but then the demand wouldn't be as great and the price would drop... Do you understand how supply and demand work?

There is always going to be a certain demand. Right now, demand is keeping up with the price they are at. If they could get it to 130 a barrel, and even if some demand dropped, but they continue to make more than they are now, they absolutely would.

[Seran]

You're missing a key thing, what if the companies artificially reduce the supply to earn more for each gallon and earn record profits.

That's exactly what they've done in the past. By cutting supply, they cause prices to increase and as a result they get more money per barrel and a higher profit with a fixed overhead.

[Tgo01]

Yeah... but then the demand wouldn't be as great and the price would drop... Do you understand how supply and demand work?

They would still be selling oil at 130 dollars per barrel, how long that price would last would depend on a lot of factors. Even if companies started pumping out more oil and prices dropped to ONLY 120 dollars per barrel they would still be selling millions of barrels of more of oil per day at 120-130 dollars. Shit even 100 dollars per barrel is still a lot more than oil has been selling for during the Trump years.

But you really think all oil companies all over the world, from giant conglomerates to small mom and pop rigs that is in someone's backyard, they all got together and decided to sell LESS oil at historic high prices because they wanted to keep the price high?

Or is the much simpler explanation that governments all over the world have curtailed oil extraction over the past couple of decades?

Psst! It's the latter.

[Gelston]

It really depends on how the cost is absorbed. Commercial is always going to have to run, but the cost increase is going to pass on in other ways.

They are shooting themselves heavily in the foot though, this is pushing people a lot more toward hybrid/electric, even commercial. They have 700 mile electric trucks coming soon and a sedan full electric is coming out next model year starting at 30k.

[Tgo01]

They are shooting themselves heavily in the foot though, this is pushing people a lot more toward hybrid/electric, even commercial. They have 700 mile electric trucks coming soon and a sedan full electric is coming out next model year starting at 30k.

This is another reason it doesn't make sense that oil companies are purposefully limiting production. There was already a big push towards electric and other alternative fuels for cars, having the price be this high is just gonna make the push that much bigger.

And it won't even require everyone to get into an electric vehicle, it would just require 10% of the miles driven being an electric vehicle to really lower oil prices.

[Tgo01]

They would still be selling oil at 130 dollars per barrel, how long that price would last would depend on a lot of factors. Even if companies started pumping out more oil and prices dropped to ONLY 120 dollars per barrel they would still be selling millions of barrels of more of oil per day at 120-130 dollars. Shit even 100 dollars per barrel is still a lot more than oil has been selling for during the Trump years.

But you really think all oil companies all over the world, from giant conglomerates to small mom and pop rigs that is in someone's backyard, they all got together and decided to sell LESS oil at historic high prices because they wanted to keep the price high?

Or is the much simpler explanation that governments all over the world have curtailed oil extraction over the past couple of decades?

Psst! It's the latter.

Another way to look at this. Let's say an oil company is pumping out 1 million barrels per day and they bump that up 20% to 1.2 million barrels per day.

At 120 dollars per barrel and 1 million barrels per day they are making 120 million dollars a day.

At 100 dollars per barrel and 1.2 million barrels per day they are still making 120 million dollars a day.

Which means oil has to drop 17% before they are earning just as much at 1.2 million barrels per day compared to 1 million barrels per day.

It makes absolutely no sense for companies to purposefully not drill for more oil.

The only way these kind of price control schemes work is if everyone involved sticks to the plan, which is also known as a cartel, which is exactly what OPEC+ is, which is almost exclusively made up of our enemies. And rather than increasing competition to OPEC to counter their power, Western nations have decided to limit their ability to compete with OPEC+ and instead allow them to do pretty much whatever they want in the realm of energy production.