Oil

[basballguy]

(05-09-2022, 11:48 AM)Stewy Wrote: Necromancing a thread.

With oil prices and gasoline prices staying high, I'd like to point out that many of the things I pointed to in earlier posts in this thread have maintained themselves (POTUS lack of being able to influence prices, worthlessness of releasing oil from the National Reserve) or come to fruition (industries lack of being able to ramp up production on a whim, politicians playing the blame game, etc).  

Supply chain, inflation and workforce constraints on top of continued capital discipline by oil companies, brought on by 8 years of low prices, price volatility and net losses, are still creating caution regardless of 100$+ oil and has not induced companies to up spending as the gov't has suspected/hoped.  Also continued calls by our gov't for more oil production, amid mixed messaging to the oil industry, is not instilling trust and confidence in the gov't, thus companies are not moving forward with a "drill baby drill" attitude.  Bottom line:  Big company projects are not short term so spending won't help "right now" and smaller Oil Shale companies couldn't spend even if they wanted to (which they do not want to) because of workforce and supply chain constraints and lack of available capitol.  Most smaller oil shale companies take on debt to drill, appraise and bring projects on to production.  They rely upon banks and investment firms.  These money sources are still mostly unwilling to provide money due to volatility (oil prices and politics) and because O&G investment has become taboo (except to Warren Buffet) due to environmentalists.

See this article on oilprice.com for more information.  There are many quotes from Oil Co. executives, with multitudes of links to data, other articles and quotes.  Interestingly, the article is just quoting the much smaller Oil Shale Co. Executives and not the big majors - https://oilprice.com/Energy/Energy-General/US-Shale-Swings-From-Losses-To-Record-Cash-Flows.html

I like this article especially, because it gives some insight into the "mixed messaging" that I was claiming (in earlier posts) the Biden Administration has been giving to our industry.  I won't say more.  You can see and judge for yourself.

No dude, we're supposed to blame Russia.  That's what we were told by CNN and Psaki.