since I am an Oil and Gas Investor... At least that is what commodity report says, and this EIA report seems to back it up. The demand tanked with COVID as did the price, so companies stopped spending money on new wells and many other projects. The price finally went above $70 / barrel last Summer, so I suppose companies are willing to start spending again.
However why pump more when you can make as much profit pumping the same? (ie keep prices high)
And right now it is still very hard and expensive to get equipment and personnel, and to ship anything...
Maybe by the end of 2022 they will get ramped up again. Until then I will keep riding the Vanguard VDE Exchange Trade Fund.
8 comments:
Supply isn't keeping up with demand. I think we should take comfort from the fact that not so long ago our gas costs were much lower when we didn't have anywhere to go.
--Hiram
That is an excellent way to see the glass half full !!!
The problem with energy pricing is that nothing in the typical household budget is easier to reduce than energy costs. Paying too much for heat in the winter or AC in the summer? Change your thermostat by a degree or two. Paying too much for gas? Take fewer car trips. Those are short term measures, and easily reversible, but what scares energy producers is that the longer prices remain high, the more people will take measures which will permanently reduce energy costs. They will insulate their houses better, or they will buy more energy efficient cars. Demand will disappear in ways that don't come back.
That's why we aren't panicking as much as we should in the current energy crisis. If prices remain high, high cost sources will come on line increasing supply and pressuring supply downward. Energy companies will reduce prices to discourage conservation and efficiency. International crises may ease. We will all be able to return to our profligate ways.
--Hiram
Unfortunately your discussion forgets that energy is used to make and transport pretty much everything... The high costs get us all, one way or another.
If we transport less energy, presumably transportation costs go down.
--Hiram
Maybe we should stop growing and transporting food?
Maybe we should stop growing and transporting food?
For me, it's newspapers and other print media that we waste a lot of transportation costs on. The fact is, because I use a lot of electronic media, my media costs are a lot lower than they otherwise could be. Does this have a negative effect on inflation? These days, instead of going to a theater to watch a movie, I often see the very same movie through a streaming service. When I do that, the movie experience costs much less. Is that factored in when calculating inflation?
--Hiram
I assume so. By a very very very slight reduction in demand...
Unless you used to drive a LONG way to your local theater...
They used to have to create rolls of film for movies... But that went away with the digital age...
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