Bank of America is now predicting that Brent crude oil, which drives gas prices, will zoom to $120 a barrel by June 2022.

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Can't agree with your response. We are pumping less oil than we were at our previous, recent, peak and oil production is being discouraged. The pipeline to which you refer needs to continue being constructed to completion for financial, gasoline costs and other reasons. Lotsa pipeline workers out of a 100k year jobs.
They are not mutually exclusive though. It's certainly true we are pumping less oil than in 2019 because the economic depression caused by the pandemic caused demand, and hence oil prices to crash into the negatives briefly, causing lots of US & Canadian oil companies to go out of business, and wells were capped to reduce supply. And the companies that remain are being forced to be frugal and use the profits from high prices to buyback stocks and issue dividends, not drill new wells. Like I said, investors don't want companies to invest tons of capex into new wells if there's a possibility prices will crash again, driving those companies out of business like the previous ones. The Ukraine crisis may have changed some minds on that however.

It's also not exactly true they are being discouraged. As I said, they own plenty of untapped land that they could use that they don't need permission to use, but are choosing not to (for the reasons above). If they really wanted to drill and pump more oil, they could easily do so, but it's not in their investors best interests to do so. And I think the pipeline should have been built probably, but not where it was being built. That said, once it was completed there were not projected to be that many permanent jobs, and construction workers are also at a premium right now anyway- like with every other industry.
 
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They are not mutually exclusive though. It's certainly true we are pumping less oil than in 2019 because the economic depression caused by the pandemic caused demand, and hence oil prices to crash into the negatives briefly, causing lots of US & Canadian oil companies went to go out of business, and wells were capped to reduce supply. And the companies that remain are being forced to be frugal and use the profits from high prices to buyback stocks and issue dividends, not drill new wells. Like I said, investors don't want companies to invest tons of capex into new wells if there's a possibility prices will crash again, driving those companies out of business like the previous ones. The Ukraine crisis may have changed some minds on that however.

It's also not exactly true they are being discouraged. As I said, they own plenty of untapped land that they could use that they don't need permission to use, but are choosing not to (for the reasons above). And I think the pipeline should have been built probably, but not where it was being built. That said, once it was completed there were not projected to be that many permanent jobs, and construction workers are also at a premium right now anyway- like with every other industry.
The pipeline canceled really wasn't for US consumption.

The way I understand it, based on this podcast I heard yesterday: https://www.marketplace.org/2022/03/07/why-do-we-import-russian-oil-when-theres-lot-u-s/

US refineries made a bet a generation ago to configure for heavy, sour crude. Much of this domestic production is light sweet crude.

It ends up getting exported.

The KXL was going to add a more direct path to an existing pipeline and a branch to the ports in Houston so the oil can more easily be exported.

It didn't really move the needle as far as domestic finished products go.
 
The pipeline canceled really wasn't for US consumption.

The way I understand it, based on this podcast I heard yesterday: https://www.marketplace.org/2022/03/07/why-do-we-import-russian-oil-when-theres-lot-u-s/

US refineries made a bet a generation ago to configure for heavy, sour crude. Much of this domestic production is light sweet crude.

It ends up getting exported.

The KXL was going to add a more direct path to an existing pipeline and a branch to the ports in Houston so the oil can more easily be exported.

It didn't really move the needle as far as domestic finished products go.
Yes, this too. It would have been mostly exported. And it would barely have made a dent in prices anyway simply because oil prices are just not driven by supply and demand in the true sense, it's driven by gamblers called oil speculators and investors.
 
They are not mutually exclusive though. It's certainly true we are pumping less oil than in 2019 because the economic depression caused by the pandemic caused demand, and hence oil prices to crash into the negatives briefly, causing lots of US & Canadian oil companies to go out of business, and wells were capped to reduce supply. And the companies that remain are being forced to be frugal and use the profits from high prices to buyback stocks and issue dividends, not drill new wells. Like I said, investors don't want companies to invest tons of capex into new wells if there's a possibility prices will crash again, driving those companies out of business like the previous ones. The Ukraine crisis may have changed some minds on that however.

It's also not exactly true they are being discouraged. As I said, they own plenty of untapped land that they could use that they don't need permission to use, but are choosing not to (for the reasons above). If they really wanted to drill and pump more oil, they could easily do so, but it's not in their investors best interests to do so. And I think the pipeline should have been built probably, but not where it was being built. That said, once it was completed there were not projected to be that many permanent jobs, and construction workers are also at a premium right now anyway- like with every other industry.
We can't agree here. Have a nice day
 
Yes, this too. It would have been mostly exported. And it would barely have made a dent in prices anyway simply because oil prices are just not driven by supply and demand in the true sense, it's driven by gamblers called oil speculators and investors.
Gamblers and speculators can only perturb the market for so long. If the underlying fundamentals don't match the trading, the bubble pops.

I don't disagree that they can exert temporary influence. But lasting influence requires something to change on either the supply or demand side.
 
Gamblers and speculators can only perturb the market for so long. If the underlying fundamentals don't match the trading, the bubble pops.

I don't disagree that they can exert temporary influence. But lasting influence requires something to change on either the supply or demand side.
In theory, but from what I've been reading lately, the bigger investors in oil these days don't care about fundamentals, don't care about what Riyadh says. This is from 2018 but still holds true today.
 
In theory, but from what I've been reading lately, the bigger investors in oil these days don't care about fundamentals, don't care about what Riyadh says. This is from 2018 but still holds true today.
I'm not an FT subscriber, so I cannot read the article.
 
Oh, right I forgot I'm using a paywall bypass add-on for firefox. Here's one of the pertinent lines

What I get from that is not that the traders don't use fundamentals. They simply use non-traditional fundamentals. Since oil is traded in dollars, I could see where someone trade oil contracts based on expected currency moves. It's almost like oil is a store of value similar, but not exactly like gold.

If you think the dollar is going to lose value due to inflationary pressures, holding a physical good, or in this case, contracts for that good, might be a hedge against inflation.
 
What I get from that is not that the traders don't use fundamentals. They simply use non-traditional fundamentals. Since oil is traded in dollars, I could see where someone trade oil contracts based on expected currency moves. It's almost like oil is a store of value similar, but not exactly like gold.

If you think the dollar is going to lose value due to inflationary pressures, holding a physical good, or in this case, contracts for that good, might be a hedge against inflation.
I mean I certainly hope that gas prices come down to a more reasonable level, I expect they'll eventually settle into the mid $3s like they did in the early 2010s for a while. I expect the initial price increase was due to fundamentals, but the traders who trade based on price trends jumped on the bandwagon and that's what spiked it to near $130/bbl
 
🤣🤣🤣 Jim you’re late to this party. 5 miles from me diesel is $6.79 already
Just pulled this up...deal!

Screenshot_20220309-185511.jpg
 
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