Posted on 01/10/2022 10:28:56 AM PST by Hojczyk
100 dollar oil gas 5 bucks a gallon?
lets go brandon!
Gee, in a normal world, such prices would spur more exploration and drilling.
But since the Thief in Chief shut down both in his first weeks in office, that ain’t happening.
Great way to improve your return! Just artificially limit supply and screw the customers!
This is why I just bought a dual sport go anywhere, bug out motorcycle that gets nearly 60 mile per gallon. If gas goes past 6 or 7 bucks a gallon, vehicles like this will become golden.
There drilling wells but only with new revenue ...not taking on debt
I went long on pixie dust futures when Brandon was elected, so I’m sitting pretty.
and when people can’t afford to drive to work?
For every bet, someone is taking the opposite side. Unfortunately, no one knows what will happen in the future, so betting is what it is.
Worse - the engineered Natural Gas shortage will lead to GLOBAL 3RD WORLD FAMINE.
3rd World Agriculture is dependent on fertilizer made with Natural gas. Fertilizer plants around the globe have shut down. Next harvest will be bad. The following harvest will be a disaster.
“Gee, in a normal world, such prices would spur more exploration and drilling.”
True, and further, just swapping a new member of the Uniparty will do nothing here. The Dems have done the damage. What company is going to make any decade long commitment to drilling/exploration if they know that they are never more than two or four years away from having the rug pulled out? The only hope is that the Dems would be beaten so soundly that they split into dem and socialist parties, or become strictly regional.
It’s a bet on prolonged inflation and a decline in the purchasing power of the U.S. dollar.
I’d say it’s not a bad bet for anyone to make right now.
Let’s Go Brandon.
Regular grade gasoline goes up roughly 25 cents a gallon for each increase of $10 a barrel of oil.
$100 = up about $22 = 50-ish cents a gallon increase.
That formula works pretty well around $50 a barrel. I don’t know how well it holds up at $78+ but it looks like we will find out.
There’s isn’t enough spare capacity to answer growing demand at this time and there won’t be spare capacity anytime soon.
In order to lower oil prices demand has to go lower because supply is constrained by lack of investment in future production. The FED may accomplish that with their interest rate raises by sometime next year.
“and when people can’t afford to drive to work?”
The price will go down due to lower demand.
“A bet on $100 oil is not based on conventional supply/demand issues for oil.
It’s a bet on prolonged inflation and a decline in the purchasing power of the U.S. dollar.”
I submit it is based on both your above sentences. The world used an all-time record amount of fossil fuels in 2021.
I also submit that inflation will head lower sooner that most here expect. (Most seem to expect it to be permanently “high”, whatever they mean by “high”.) I think in 2-3 years the FED will be back to worrying about deflation, which is much worse than inflation, everybody’s favorite boogie man.
INFLATION reflects the ongoing fiscal/monetary disaster we have brought upon ourselves.
thank you... they can raise it to $200, but if nobody buys it, price goes down, since it’s artificial to begin with
Remember back in the days of Orangeman Bad how a barrel of oil got so cheap at one point the price went negative? Pepperidge Farm remembers.
-PJ
“Deflation is the underlying demographic/economic trend we’re dealing with.
INFLATION reflects the ongoing fiscal/monetary disaster we have brought upon ourselves.”
The “tug of war” between deflation & inflation could go on all decade.
I’m in the inflation is overrated camp, because of demographics(people are dying off with no replacements) and a misalignment of labor and capital globally.(nonessential businesses are a dime a dozen) Those nonessential businesses have been “pampered and babied” all over the globe. When they lose access to public and private credit, their operations will die off.
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