Quote:
Originally Posted by GGG
Can you concisely summarize the positions in the video. 30 minutes of homework to participate is not really a reasonable way to start a discussion. I watched the end of the first video and to me it leaves out the why oil companies are hesitant to expand production.
One thing that is entirely reasonable is oil companies not investing earnings into new production because of this blip in prices. That isn’t the reason prices are high today.
The investment time frame for oil development to return profit has shrunk because people believe the net zero commitments
The cost of borrowing for oil and gas development is up because of it being a sin stock
Oil stocks are under valued relative to revenue in todays markets
These three things make the path of medium and junior companies investing and expanding production then going public to return capital to investors not nearly as viable as it used to be. And for the majors the market is paying more for dividends and balance sheet then it is for expansion of production.
So while the idea that is pitched of Climate regs are killing the oil industry isn’t true. The long term plan to move away from fossil fuels has changed how investors see O+G. Keep cost low production flat and pay dividends
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Yes, mostly correct, however the current spike in prices has more to do with unwillingness to produce more, due to OPEC (now OPEC+ having even more control over the world's supply than before) reducing output deliberately to keep prices high and make more immediate profits; they have the means to produce more right now if they wanted to, but are simply choosing not to. In fairness, this is less true in recent weeks, as OPEC+ has increased its output targets.
The 2nd video talks about how O&G companies are using the war in Ukraine to deceptively claim that they need more deregulation, more permits, and more pipelines in order to "save Ukraine" and "save the world from dependence on Russia's oil". The reality is these companies have quickly returned to a state of enormous profitiability (since the brief pandemic slump), already have loads of drilling permits, and are not suffering from regulation the way they want you to believe. Furthermore, by giving the oil industry what they want, the world will stay addicted to oil for longer, which plays directly into Russia's hands. Not exactly a sound strategy if your goal really is to make the world independent from Russian energy, a country that has huge oil reserves and the world's largest natural gas reserves.
The 3rd video goes into detail as to what has caused and continues to cause supply chain issues throughout the economy, and explains why there is so much turnover and staff shortages in areas such as truckers and warehouse workers. Summed up into one sentence... basically, workers are treated like crap.