Gas prices under Biden increased 48.4% in the year before Ukraine even though he blames Putin for all his problems. Within days of taking office Biden attacked oil companies, halted leases on federal lands, and took a series of executive actions all aimed at reducing gas and oil production. Combined with more demand from consumers the rules of supply and demand occur.
Friday California announced they will not have enough power this summer but of course did not say they have shut down many natural gas fired electric plants and now produce less power. Perhaps like biden they will also blame putin.
I know I do not like the high pump prices but those with trust funds and oil company stock certainly take some pleasure in higher profits.
"President's have very little impact on short-term supply,” according to Abhiram Rajendran, the head of oil market research at Energy Intelligence,
“U.S. oil production fell in the last eight months of President Trump’s tenure," according to Patrick De Haan, the head of petroleum analysis for GasBuddy, which tracks gasoline prices.
COVID caused a drop in demand, oil prices even went negative for a bit in 2020, which caused a significant decline in output.
As economies recovered, demand outpaced supply, OPEC continued to limit production, and investors remained cautious in lending to oil companies for more drilling. All these factors caused prices to climb. Ukraine just made it worse.
Gas isn't high because of Biden. It was the good 'ole free market at work. Companies raise prices, not presidents.
As to California, because of the drought, there is less water behind dams to provide electricity, the natural gas plants are old and unrelaible and "high temperatures, boiler tube leaks and restricted cooling water inlet flows due to debris" caused shut downs when they were needed, according to one plant owner. It is probably true that if California suspended environmental and zoning restrictions, new plants could be built that would be economically viable — for a while.
Of course Covid impacted supply and demand but markets also respond to Presidents who attack their industry. I know as a liberal you have a tough time accepting the fact Biden is at 33% approval on the economy, but his policies have had a large impact on how companies plan the future. If Biden backed off of Keystone, quit slow walking drilling permits, and made a statement of support for the oil industry the market would immediately respond. But he is not ready to take on the far left or perhaps in his current mental state does not have the capacity to understand.
I have no trouble accepting that Biden has a 33% approval rating on the economy. Whether that's relevant to the disussion is open to question.
Your statment that the oil market would "immediately respond" to sweet talk from Biden is not based in reality. The industry is already sitting on a small mountain of approved permits but is not drilling. Why? According to some reports, because they are "returning cash to investors instead of drilling new wells … facing bottlenecks for equipment, rigs and labor."
But I'm not looking at this through the lens of presidential politics. And in that, you're just using this as an opportunity for bashing, which is not very interesting and does not contribute to the discussion.
I was not bashing but trying to point out his approval rating is tied to perception. Voters perceive Biden has hurt oil prices and more importantly investors are hesitant because of the negative language they hear. Presidents can move markets which would help. And you are correct there are many factors and I submit Biden is one of them.
The bashing was your last sentence: Biden, Progressives, California, etc. Thankfully you left out Ben Gazi and Hillary. In the movies, they call it gratuitous.
I agree approval rating is tied to perception… they may be one and the same in this instance. But perception is often wrong, incomplete, manipulated… and I offered evidence in our back and forth that presidents don't really move oil markets that much aside from concrete action — like opening the strategic reserves (which the Biden administration has done). Investment, profit opportunity, actions of players outside the U.S. that provide most of the world's supply, are far more influential on prices.
Profit is not *bad.* Profit is integral with investment, and one of the magic powers of capitalism. But like all magic (recall Mickey Mouse in Fantasia) it's power can overwhelm and become destructive.
I was pointing out that gas prices are up in step with oil company profits. Your arguments would be more effective if prices were up and profits were down, if oil companies had to raise prices in the face of all the negative goverrnment actions you offered to cover their costs, or even maintain profit margins.
Shell made 13%. Apple made 26% profit a bit better than Google. Ask what each company invests in toward their future growth and what they produce of real value to the economy. Nominally Shell will reinvest in more energy production worldwide.
Alas, Exxon only made ~6% profit. It has a bit less to reinvest in energy production. Exxon leases in NM are not being exploited for policy reasons but Nigeria will benefit.
For consumers, Bank of America made 31% profit. Money makes money, remarkable. Sadly in the coming days, the market thinks BAC will not do quite as well. They will be hurt along with consumers as wallets tighten.
As to Apple's profit and investment vs. Shell, and the value of what they produce to the economy… I'm going to untangle the compound question.
Shell will invest in more energy production world-wide (I should try to figure out how much as a percentage of revenue, but don't want to), and certainly a portion of Shell's profit is likely to go toward replacing production from Russia. Russia's oil fields will suffer significant degradation as a result of the war in Ukraine, Peter Ziehan points out. The world is not ready to do without.
In April 2021, Apple announced plans to invest more than $430 billion and add 20,000 new jobs across the country over the next five years. Which is of "real value" to the economy? Because of so many assumptions in value judgements, I'm not qualified to answer that. Apple's spending on "next-generation silicon development and 5G innovation," or oil in an age of climate change?
As to B of A profit of 31%, yes, money makes money. Money acretes power, and power gathers money. VISA is trying to own our money and already collects what used to be considered usurious fees as it manipulates people into late payments.
I think your question about "real value to the economy" takes even more significance when speaking of B of A, and especially Goldman Sachs, and the entire leveraged buy-out sector. The private equity industry should be required to put far more skin in the game, and not suck dollars as fees for as long as they last and then let the husk bankrupt out from under debt saddled with in the acquisition, leaving suppliers and employees with ashes for retirement.
The Old White Liberal in me has wished more than once that the brilliant young Wall Streeters gambling with the nation's savings were instead focused on building things or finding efficiencies, rather than creating worthless derivatives of junk they sell to customers they were betting against in markets they controlled. And the entire upper management of Wells Fargo should spend a year in jail.
So no, I don't know how much is enough, and how much is more than enough. I don't know whether Shell Oil and Aramco manipulate the oil market, though I believe Marathon exerts influence that harms Americans and absolutely does not care about the damage caused.
Oddly, after this screed, I actually believe in capitalism and markets. But just as the Bill of Rights was created to protect Americans from the tyrannies possible within democracy, without mechanisms to keep greed in check capitalism will gorge itself until it explodes.
Without a doubt the oil market is manipulated to an extent. The 'easy' oil only exists in a few places in the middle east and by controlling production they maximize their profits. Frackers in the US mine harder oil and at one point the middle easy drove prices down in an attempt to kill of frackers. Energy underlies many costs but until we can devise better nuclear energy (real soon now) we are captives.
Financial engineering is possible in a world of excess and we have had that for some time. It is appalling. Odd that Congress has really not addressed taxing those services. Trump said he would go after the hedge funds but seems Paul Ryan outfoxed him; Trump signed the bill anyway. Few since have made much noise. I suppose the lobby is too strong and many may be benefiting. We can certainly agree that their excesses ought to have had consequences.
The point I think is that many producing firms don't have really high returns despite rather large numbers and the oil boys will soon be under attack for 'excess profits'. Meanwhile some firms that produce entertainment are quite profitable. But in a stressed economy their services and profits will fall as these are not particularly productive assets.
It doesn't seem that long ago that the Saudis and Russians colluded to push prices down and kill the U.S. fracking industry. Then investors may have been premature in declaring the death of Big Oil by witholding investment in production. As to the other, there's an 8 lane expressway between Wall Street and Washington, with no tolls but travel is limited to limosines.
So I dont like the high prices of the consumer goods but tell me how to not pay the higher prices. I have to travel to work to pay my Bill's. I have to eat. I feel I'm forced to pay the prices what options do I have. Only thing I can hope for is things change in November
Scott, despite what you're hearing on Fox, Democrats did not create this inflation. The roots of this round precede Biden, and Trump, and Obama. Both parties participated, but many of the real villains occupy corner suites in office buildings. They raise the prices becaue they can, and their own bonuses depend on it. Some would say they had an obligation to do so, this being America.
Vote howver you will in the next election. But my worry for you and your family and all of the rest who aren't in the top 1% is that your hardship is the cure for inflation, they will cut your hours or put you out of work so you can't buy what you need, so demand will go down until prices level out.
But the Republicans in the executive offices won't feel a thing.
Don't be mad, and certainly not hopeless. And I don't think we're helpless, either. My plan is to buy less of things that cost more wherever I can. More chicken, less steak, as it were. We'll get through this. You and I have much to be thankful for.
Gas prices under Biden increased 48.4% in the year before Ukraine even though he blames Putin for all his problems. Within days of taking office Biden attacked oil companies, halted leases on federal lands, and took a series of executive actions all aimed at reducing gas and oil production. Combined with more demand from consumers the rules of supply and demand occur.
Friday California announced they will not have enough power this summer but of course did not say they have shut down many natural gas fired electric plants and now produce less power. Perhaps like biden they will also blame putin.
I know I do not like the high pump prices but those with trust funds and oil company stock certainly take some pleasure in higher profits.
This is misleading.
"President's have very little impact on short-term supply,” according to Abhiram Rajendran, the head of oil market research at Energy Intelligence,
“U.S. oil production fell in the last eight months of President Trump’s tenure," according to Patrick De Haan, the head of petroleum analysis for GasBuddy, which tracks gasoline prices.
COVID caused a drop in demand, oil prices even went negative for a bit in 2020, which caused a significant decline in output.
As economies recovered, demand outpaced supply, OPEC continued to limit production, and investors remained cautious in lending to oil companies for more drilling. All these factors caused prices to climb. Ukraine just made it worse.
Gas isn't high because of Biden. It was the good 'ole free market at work. Companies raise prices, not presidents.
As to California, because of the drought, there is less water behind dams to provide electricity, the natural gas plants are old and unrelaible and "high temperatures, boiler tube leaks and restricted cooling water inlet flows due to debris" caused shut downs when they were needed, according to one plant owner. It is probably true that if California suspended environmental and zoning restrictions, new plants could be built that would be economically viable — for a while.
Of course Covid impacted supply and demand but markets also respond to Presidents who attack their industry. I know as a liberal you have a tough time accepting the fact Biden is at 33% approval on the economy, but his policies have had a large impact on how companies plan the future. If Biden backed off of Keystone, quit slow walking drilling permits, and made a statement of support for the oil industry the market would immediately respond. But he is not ready to take on the far left or perhaps in his current mental state does not have the capacity to understand.
I have no trouble accepting that Biden has a 33% approval rating on the economy. Whether that's relevant to the disussion is open to question.
Your statment that the oil market would "immediately respond" to sweet talk from Biden is not based in reality. The industry is already sitting on a small mountain of approved permits but is not drilling. Why? According to some reports, because they are "returning cash to investors instead of drilling new wells … facing bottlenecks for equipment, rigs and labor."
But I'm not looking at this through the lens of presidential politics. And in that, you're just using this as an opportunity for bashing, which is not very interesting and does not contribute to the discussion.
I was not bashing but trying to point out his approval rating is tied to perception. Voters perceive Biden has hurt oil prices and more importantly investors are hesitant because of the negative language they hear. Presidents can move markets which would help. And you are correct there are many factors and I submit Biden is one of them.
The bashing was your last sentence: Biden, Progressives, California, etc. Thankfully you left out Ben Gazi and Hillary. In the movies, they call it gratuitous.
I agree approval rating is tied to perception… they may be one and the same in this instance. But perception is often wrong, incomplete, manipulated… and I offered evidence in our back and forth that presidents don't really move oil markets that much aside from concrete action — like opening the strategic reserves (which the Biden administration has done). Investment, profit opportunity, actions of players outside the U.S. that provide most of the world's supply, are far more influential on prices.
Profit is not *bad.* Profit is integral with investment, and one of the magic powers of capitalism. But like all magic (recall Mickey Mouse in Fantasia) it's power can overwhelm and become destructive.
I was pointing out that gas prices are up in step with oil company profits. Your arguments would be more effective if prices were up and profits were down, if oil companies had to raise prices in the face of all the negative goverrnment actions you offered to cover their costs, or even maintain profit margins.
But that's not the case. Follow the money.
Shell made 13%. Apple made 26% profit a bit better than Google. Ask what each company invests in toward their future growth and what they produce of real value to the economy. Nominally Shell will reinvest in more energy production worldwide.
Alas, Exxon only made ~6% profit. It has a bit less to reinvest in energy production. Exxon leases in NM are not being exploited for policy reasons but Nigeria will benefit.
For consumers, Bank of America made 31% profit. Money makes money, remarkable. Sadly in the coming days, the market thinks BAC will not do quite as well. They will be hurt along with consumers as wallets tighten.
Excellent points made here, HardeeHo. Thank you.
As to Apple's profit and investment vs. Shell, and the value of what they produce to the economy… I'm going to untangle the compound question.
Shell will invest in more energy production world-wide (I should try to figure out how much as a percentage of revenue, but don't want to), and certainly a portion of Shell's profit is likely to go toward replacing production from Russia. Russia's oil fields will suffer significant degradation as a result of the war in Ukraine, Peter Ziehan points out. The world is not ready to do without.
In April 2021, Apple announced plans to invest more than $430 billion and add 20,000 new jobs across the country over the next five years. Which is of "real value" to the economy? Because of so many assumptions in value judgements, I'm not qualified to answer that. Apple's spending on "next-generation silicon development and 5G innovation," or oil in an age of climate change?
As to B of A profit of 31%, yes, money makes money. Money acretes power, and power gathers money. VISA is trying to own our money and already collects what used to be considered usurious fees as it manipulates people into late payments.
I think your question about "real value to the economy" takes even more significance when speaking of B of A, and especially Goldman Sachs, and the entire leveraged buy-out sector. The private equity industry should be required to put far more skin in the game, and not suck dollars as fees for as long as they last and then let the husk bankrupt out from under debt saddled with in the acquisition, leaving suppliers and employees with ashes for retirement.
The Old White Liberal in me has wished more than once that the brilliant young Wall Streeters gambling with the nation's savings were instead focused on building things or finding efficiencies, rather than creating worthless derivatives of junk they sell to customers they were betting against in markets they controlled. And the entire upper management of Wells Fargo should spend a year in jail.
So no, I don't know how much is enough, and how much is more than enough. I don't know whether Shell Oil and Aramco manipulate the oil market, though I believe Marathon exerts influence that harms Americans and absolutely does not care about the damage caused.
Oddly, after this screed, I actually believe in capitalism and markets. But just as the Bill of Rights was created to protect Americans from the tyrannies possible within democracy, without mechanisms to keep greed in check capitalism will gorge itself until it explodes.
Without a doubt the oil market is manipulated to an extent. The 'easy' oil only exists in a few places in the middle east and by controlling production they maximize their profits. Frackers in the US mine harder oil and at one point the middle easy drove prices down in an attempt to kill of frackers. Energy underlies many costs but until we can devise better nuclear energy (real soon now) we are captives.
Financial engineering is possible in a world of excess and we have had that for some time. It is appalling. Odd that Congress has really not addressed taxing those services. Trump said he would go after the hedge funds but seems Paul Ryan outfoxed him; Trump signed the bill anyway. Few since have made much noise. I suppose the lobby is too strong and many may be benefiting. We can certainly agree that their excesses ought to have had consequences.
The point I think is that many producing firms don't have really high returns despite rather large numbers and the oil boys will soon be under attack for 'excess profits'. Meanwhile some firms that produce entertainment are quite profitable. But in a stressed economy their services and profits will fall as these are not particularly productive assets.
It doesn't seem that long ago that the Saudis and Russians colluded to push prices down and kill the U.S. fracking industry. Then investors may have been premature in declaring the death of Big Oil by witholding investment in production. As to the other, there's an 8 lane expressway between Wall Street and Washington, with no tolls but travel is limited to limosines.
So I dont like the high prices of the consumer goods but tell me how to not pay the higher prices. I have to travel to work to pay my Bill's. I have to eat. I feel I'm forced to pay the prices what options do I have. Only thing I can hope for is things change in November
Scott, despite what you're hearing on Fox, Democrats did not create this inflation. The roots of this round precede Biden, and Trump, and Obama. Both parties participated, but many of the real villains occupy corner suites in office buildings. They raise the prices becaue they can, and their own bonuses depend on it. Some would say they had an obligation to do so, this being America.
Vote howver you will in the next election. But my worry for you and your family and all of the rest who aren't in the top 1% is that your hardship is the cure for inflation, they will cut your hours or put you out of work so you can't buy what you need, so demand will go down until prices level out.
But the Republicans in the executive offices won't feel a thing.
I hear and agree with what your saying. Feeling mad, helpless and hopeless
Don't be mad, and certainly not hopeless. And I don't think we're helpless, either. My plan is to buy less of things that cost more wherever I can. More chicken, less steak, as it were. We'll get through this. You and I have much to be thankful for.