Things that made you laugh today (Political Version)

[Seran]

Biden contributed to reaching this destination we are in. I’ll concede there isn’t an easy fix and the President has limited influence / power from this point forward to influence our economy in the right direction. A good start would to first admit that we have a serious domestic economic issues. Perhaps he could apologize to the oil industry for being such a dick when he took office and have regular business round table with petro industry executives to discuss how he can change his energy policy to better support our domestic production needs & energy independence. How about stop printing money for dumb reasons? We’re going to need to have a real talk to Ukraine to say that we support you guys but American interest comes first, and right now we’re kinda broke. Also, maybe we need to think about putting on hold some of these expensive climate change driven alternative energy investments & infrastructure temporarily while our economy recovers.

But nah…instead we’ll just get some kind suggestion that Congress pass a “Don’t Say Recession” bill.

Apologizing to Oil Industry

To let's start with this. If President Biden never said in speeches that he wanted to reduce America's dependence on fossil fuels, never said he wanted to regulate fracking on federal lands, etc., do you think the the Oil Industry would be going whole hog in increasing capital expenditures? I don't think they would, because they've said so repeatedly, that capital expenditures are curtailed as a result of investors demanding higher dividends. Let's forget they're also doing massive stock buybacks, there is no incentive for Big Oil to take action to lower prices domestically when by doing nothing they achieve higher profits.

Their shareholders would likely vote down every single board member who said let's dramatically increase the supply of oil to lower our profits and help everyday Americans. That's reality.

Printing Money for Dumb Reasons

We're running massive deficits, that's the truth. The government is spending more money than it's taken in. This is a combination of massive tax cuts and neither party having a stomach to pass legislation to cut spending. Bear in mind we were drowning in red ink as a result of QE and the cost of wars long before Trump cut taxes, so that made no sense.

But as for the PPP, American Rescue Act, etc., the former prevented our country for sinking into a massive recession or depression as a result of the pandemic. Millions have died worldwide, that's a fact. Businesses didn't have workers due to illness, that's a fact. The business loan forgiveness program that went to non-fraudulent businesses kept a lot of them open and the economy grudgingly staying active, also a fact.

Stimulus to individuals gets spent, particularly for those making less than 75k a year. Why do you think child tax credits have such massive bipartisan support? Money to poorer families with children and who are justified scraping buy allows them to pay bills, rent, buy goods and services that ultimately make up 60% of our GDP.

Defense Relief in Ukraine

I agree in part and disagree in part. I think giving /some/ money or requirement to help the Ukrainian people is no different than any humanitarian assistance we provide to many other countries. The Ukrainian people have a right to defend them from Russian dictatorship and expansionist philosophies.

I don't think we have any business contributing five to ten times as much as other donor countries and I don't believe we should give them a dime to reconstruct. Marshall Plan to help them rebuild their country? No. But here's $300 billion in foreign exchange reserves we are holding from Russia that we'll give to you in installments. Fuck Russia.

Putting a hold on Alternate Energy Investment

No, just no. Fuck no even.

If we stopped outsourcing coal, oil and gas by law and said they would only be used to meet domestic energy needs, our country would be set on fire by the world and by the domestic oil industry. They have absolutely no desire to return to a closed market and would just as soon shut down production, than devote every bit of their output to meet local energy needs. Think differently? Show me where I'm wrong.

Hydroelectric, geothermal, solar and wind energy have been masses boons to a country that's so anti nuclear it's stupid. The amount of power produced even in the redest of state's provides much needed relief for fossil fuel driven plants which are aging and continuously need to be shut down for maintenance.

[Seran]

I believe Manchin just caved and they are passing more spending bills as we discuss the recession we are in.

It's offset by tax increases, so it'll help the deficit. And besides, Manchin won't actually go through with it.

[Methais]

[Tgo01]

The White House's website just redefined what "recession" means so they can now say we aren't in a recession. Get ready for this talking point to make its way through the entire mainstream media and the Democrat party at large.

There has been a struggle between some Wikipedia editors changing the "recession" page to mean what Biden's White House is shitting out, and other editors trying to keep the original definition in place.

CNN, MSNBC, ABC, NBC, and the rest of the leftwing media has been tossing aside the definition we have been using for decades in this country to describe a recession.

It's almost like I can predict the future!

Naww. I just know how the mind of your typical deranged far leftist works and I know the mainstream media is bought and paid for by the Democrats.

[Suppressed Poet]

Seran, you ever buy name brand soda at the grocery store? If you do you will notice they all have the same kind of sales special always going on. Something like buy 4x six packs of bottled Coke for $12, but only when you buy 4. If you buy less than 4 you pay the standard price per six-pack of $5.49 each. They sell it a little cheaper in bulk but in the end, the grocery store and Coca-Cola make more net revenue selling you 4 at a lower price instead of just 1 at a much higher price.

Same basic economic principles of supply & demand do also apply to the oil industry…

[Seran]

Seran, you ever buy name brand soda at the grocery store? If you do you will notice they all have the same kind of sales special always going on. Something like buy 4x six packs of bottled Coke for $12, but only when you buy 4. If you buy less than 4 you pay the standard price per six-pack of $5.49 each. They sell it a little cheaper in bulk but in the end, the grocery store and Coca-Cola make more net revenue selling you 4 at a lower price instead of just 1 at a much higher price.

Same basic economic principles of supply & demand do also apply to the oil industry…

Wait, did you just compare the marketing of soda and bulk pricing to the other oil markets? They're not even remotely similar. Oil prices are set either by ratings agencies hired by oil companies, who determine spot prices for direct, immediate purchases, or they're priced via futures contracts, which is subject to artificial demand creation by non-delivery speculators. Oil doesn't have a shelf life, meaning you can take advantage of a low spot purchase price and sit on a massive delivery of oil until prices increase and you can resale or refine into distillates at a much higher profit rate. Meanwhile, coca cola has a shelf life and my body doesn't care whether the six pack I purchased yesterday or three months ago had wildly different prices. I can't buy a flat of Coca-Cola and sit on it for a year with the hopes of reselling it.

[Suppressed Poet]

Wait, did you just compare the marketing of soda and bulk pricing to the other oil markets? They're not even remotely similar. Oil prices are set either by ratings agencies hired by oil companies, who determine spot prices for direct, immediate purchases, or they're priced via futures contracts, which is subject to artificial demand creation by non-delivery speculators. Oil doesn't have a shelf life, meaning you can take advantage of a low spot purchase price and sit on a massive delivery of oil until prices increase and you can resale or refine into distillates at a much higher profit rate. Meanwhile, coca cola has a shelf life and my body doesn't care whether the six pack I purchased yesterday or three months ago had wildly different prices. I can't buy a flat of Coca-Cola and sit on it for a year with the hopes of reselling it.

Oil company A makes 1 barrel of oil and sells it at $5 per barrel.

Oil company B makes 2 barrels of oil and sells it both at $4 per barrel.

Assume in this very simple example that it cost both companies $1 to produce their barrels of oil. Which company made more of a profit?

The point of this exercise is that you seem to be having trouble grasping that all companies want to sell as much product as they can at the highest possible price. There is an optimal spot on the supply vs demand curve that will afford the business the most profit. When oil is trading at roughly $100+ a barrel, that’s a pretty damn good sign that global demand is outpacing production. The oil companies would absolutely want to make more oil and it wouldn’t make sense for them to suppress their production just to keep the prices high. Now current market conditions could change and shareholders may not want to invest the capital required to increase production, but that’s a more complicated lesson about risk & government regulation.

[Seran]

Oil company A makes 1 barrel of oil and sells it at $5 per barrel.

Oil company B makes 2 barrels of oil and sells it both at $4 per barrel.

Assume in this very simple example that it cost both companies $1 to produce their barrels of oil. Which company made more of a profit?

The point of this exercise is that you seem to be having trouble grasping that all companies want to sell as much product as they can at the highest possible price. There is an optimal spot on the supply vs demand curve that will afford the business the most profit. When oil is trading at roughly $100+ a barrel, that’s a pretty damn good sign that global demand is outpacing production. The oil companies would absolutely want to make more oil and it wouldn’t make sense for them to suppress their production just to keep the prices high. Now current market conditions could change and shareholders may not want to invest the capital required to increase production, but that’s a more complicated lesson about risk & government regulation.

Except no, company B would say, why don't I sell two barrels of oil at $5 a barrel and make a larger profit. What YOU aren't understanding is that domestic oil companies don't have bulk wholesale discounts like you're thinking they do. Spot contracts are priced according to daily oil indexes and are determined by agencies hired by US Oil Companies. They then deliver the product which incurs a varying cost of transport depending on how delivery is done. The second method of contract is a futures contract, which is largely influenced by the WTI price, which is an index of several oil types produced in the US of varying qualities. But this is for delivery at a future date.

So with that in mind,

Oil company A makes 1 barrel of oil and sells it at a spot price of $5 per barrel.

Oil company B may choose to sell 2 barrels of oil at a spot price of $5 per barrel. OR it may offer a futures contract to sell 2 barrels of oil at contracted rate of $4-6 for delivery in October according to speculative pricing. That is the option it has.

Everything else you said was mostly nonsense.

[Suppressed Poet]

Except no, company B would say, why don't I sell two barrels of oil at $5 a barrel and make a larger profit. What YOU aren't understanding is that domestic oil companies don't have bulk wholesale discounts like you're thinking they do. Spot contracts are priced according to daily oil indexes and are determined by agencies hired by US Oil Companies. They then deliver the product which incurs a varying cost of transport depending on how delivery is done. The second method of contract is a futures contract, which is largely influenced by the WTI price, which is an index of several oil types produced in the US of varying qualities. But this is for delivery at a future date.

So with that in mind,

Oil company A makes 1 barrel of oil and sells it at a spot price of $5 per barrel.

Oil company B may choose to sell 2 barrels of oil at a spot price of $5 per barrel. OR it may offer a futures contract to sell 2 barrels of oil at contracted rate of $4-6 for delivery in October according to speculative pricing. That is the option it has.

Everything else you said was mostly nonsense.

I do understand the additional complexity of how oil is valued and that it’s a commodity with global demand. The same basic supply and demand principle still applies. They want to sell as much oil as they can for the highest possible price. Your repeated claim that domestic oil producers are intentionally keeping their production low in an effort to keep demand and prices artificially high doesn’t make dollars. If it ain’t making dollars, it doesn’t make cents (sense).

[Seran]

I do understand the additional complexity of how oil is valued and that it’s a commodity with global demand. The same basic supply and demand principle still applies. They want to sell as much oil as they can for the highest possible price. Your repeated claim that domestic oil producers are intentionally keeping their production low in an effort to keep demand and prices artificially high doesn’t make dollars. If it ain’t making dollars, it doesn’t make cents (sense).

So now you're referring to something in another topic that was never presented in your post as the source of your argument. Okay, let's move to your new goal post.

Domestically produced oil, a globally traded commodity as of 2015, is subject to supply and demand. Right? Right. So, when supply is curtailed by a natural disaster, war, embargoes, then supply drops. As a result, there is more demand for what is available. You with me so far?

Alright, so the second piece of this puzzle that I'm sure is going to absolutely blow your mind, oil companies are private entities in the Untied States and are allowed to produce and sell whatever quantity they want. Shocker, right? So, when demand increases relative to supply, they can sell 100 barrels at higher price.

Two years ago, oil flirted with $20-$30 a barrel for some time and even went negative. Oil is only profitable to sell, that is, to make up for the cost of making more oil available to replace what's sold, at an amount of excess of $40 a barrel. So another shocker, oil companies turned off the taps and sold quite a bit less oil in order to, wait for it, wait until the price of oil went up and they could sell the same oil at a higher price.

Under your fantasy, oil companies were selling the same amount of oil at $20-$30 a barrel that they are now selling for $90-$100 a barrel and that basic misunderstanding of yours is disproven looking at production and sales reports.