A lot of crap floating around out there on social media, Fox News, etc... figured it was worth starting a thread on this topic to dispel a lot of the myths being spread around these days.
It was many years ago now that products were shifted into being judged as "global commodities". So even though they were produced locally, transported locally and purchased locally, they are priced on the relative value on the global market.
That seems like a bit of a failed experiment benefitting only the rich.
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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
It was many years ago now that products were shifted into being judged as "global commodities". So even though they were produced locally, transported locally and purchased locally, they are priced on the relative value on the global market.
That seems like a bit of a failed experiment benefitting only the rich.
Doesn’t that happen due to the nature of the modern world. The price of a local commodity will always be the cost of the commodity somewhere else plus the cost to ship it.
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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
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.
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Last edited by Mathgod; 06-12-2022 at 10:54 PM.
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Doesn’t that happen due to the nature of the modern world. The price of a local commodity will always be the cost of the commodity somewhere else plus the cost to ship it.
Which is really stupid when you think about it. Someone came up with that, and for some reason we all just bought it.
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Which is really stupid when you think about it. Someone came up with that, and for some reason we all just bought it.
It isn't like an academic theory though, that's just what logically happens. If you can get a higher price for something by moving it somewhere else and selling it there, that's what you do. Enough sellers do that until the price equalizes.
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I always find this hilarious. Everyone seems to think we need to take major drastic steps to combat climate change. And fair enough. But if even a 50 cent hike in gas prices is UNACCEPTABLE, then what the #### are you even talking about? Gas needs to be 4 bucks a litre and literally everything else outside of locally produced products needs to go up a similar amount.
Just figure out what you actually want already. Hunt: it can't be "solve the world's problems without inconvenience me personally or affecting my life in any way".
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I always find this hilarious. Everyone seems to think we need to take major drastic steps to combat climate change. And fair enough. But if even a 50 cent hike in gas prices is UNACCEPTABLE, then what the #### are you even talking about? Gas needs to be 4 bucks a litre and literally everything else outside of locally produced products needs to go up a similar amount.
Just figure out what you actually want already. Hunt: it can't be "solve the world's problems without inconvenience me personally or affecting my life in any way".
I think the issue is that "Everyone" is not really everyone as not everyone believes we need to make drastic changes. Low income families that are just trying to make ends meet likely have different priorities than wealthy people and politicians.
Is it me or does the reported inflation numbers for Canada seem really low? When you look at groceries, gas and natural gas alone, the number 6.8 seems low. That doesn't include things like vehicles which are up 15-20% etc.
Is it me or does the reported inflation numbers for Canada seem really low? When you look at groceries, gas and natural gas alone, the number 6.8 seems low. That doesn't include things like vehicles which are up 15-20% etc.
Possibly because of the methodology and weighting built into the CPI model which assigns a relatively low proportion to fuel, natural gas and electricity.
Inflation/Gas Prices/Rising Prices in General
