The source of high gas prices

PaoliLion

Well-Known Member
Nov 2, 2003
12,182
6,109
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oil and gas companies have shown little willingness so far to ramp up production to help reduce costs and the new report, by the government watchdog group Accountable.US, accuses them of “taking advantage of bloated prices, fleecing American families along the way” amid ongoing fallout from the Covid-19 pandemic.

“Americans looking for someone to blame for the pain they experience at the pump need look no further than the wealthy oil and gas company executives who choose to line their own pockets rather than lower gas prices with the billions of dollars in profit big oil rakes in month after month,” said Kyle Herrig, president of Accountable.US.

The analysis of major oil companies’ financials shows that 11 of the group gave payouts to shareholders worth more than $36.5bn collectively this year, while a dozen bought back $8bn-worth of stock. This apparent focus, rather than on further drilling, has caused some frustration within the federal government, with Jennifer Granholm, the US energy secretary, stating that “the oil and gas companies are not flipping the switch as quickly as the demand requires.”

A glut of new oil drilling has made the US awash with oil in recent years, turning the country into a top-level exporter as well as domestic supplier, but this has kept prices low to the displeasure of investors. “A lot of this has been driven by investor sentiment,” said Helima Croft, head of global commodity strategy at RBC Capital Markets, of the current reluctance to expand production. “They don’t want them to spoil the party.”

The situation has left the White House in an awkward position with its commitments to rapidly reduce planet-heating emissions, with environmentalists furious at administration attempts to expand drilling.


 

HartfordLlion

Well-Known Member
Sep 28, 2001
21,858
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LOL. Climate activists have have been hammering oil and gas companies for their production of CO2 producing gas and oil. Oil companies are getting hauled into Congress to testify about greenhouse gases by Dems. They show restraint partially because of these activists and being vilified by Dems in Congress, some who have sitting on Exxon's board, and people like you start crying that they are keeping prices high for their own profit. Get the F'k out of here.
 

The Spin Meister

Well-Known Member
Nov 27, 2012
24,291
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An altered state
Lots of things in play here. The oil majors set their budgets in Jan so that was way before prices spiked. They are notorious for being slow to react which is why they did poorly in leasing in Pa. Way to much bureaucracy. The more agile independents beat them to the prime locations.

Another is ESG, keep-it-in-the-ground movements, RGGI, and other movements that make it much harder for the independents to get financing. Some of the biggest private equity firms like Carlyle and Black Rock have been under heavy pressure to not finance E&P firms. These firms need to build cash reserves now so they can afford new drilling activities.

Add in other factors like shutting down pipeline construction, cutting leases on federal lands, higher regs on existing facilities, and more drive up prices. Oil and gas are commodities traded on the open market so when there are new policies that will restrict production the price goes up.

Don’t forget some additional supply constraints and associated price pressures from events like loss of production due to Covid last year, the big Texas freeze, several major hurricanes this past summer in the production rich Gulf, and a huge increase in exports to Europe and Asia because of a loss of wind power in Europe and cold weather in Asia.
 
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The Spin Meister

Well-Known Member
Nov 27, 2012
24,291
28,009
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An altered state
So just on the day after Thanksgiving.....when they knew no one is paying attention including the corporate news hacks......the Interior Dept issued its report on drilling and production that was supposed to be released in early summer.

 

bdgan

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May 29, 2008
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oil and gas companies have shown little willingness so far to ramp up production to help reduce costs and the new report, by the government watchdog group Accountable.US, accuses them of “taking advantage of bloated prices, fleecing American families along the way” amid ongoing fallout from the Covid-19 pandemic.

“Americans looking for someone to blame for the pain they experience at the pump need look no further than the wealthy oil and gas company executives who choose to line their own pockets rather than lower gas prices with the billions of dollars in profit big oil rakes in month after month,” said Kyle Herrig, president of Accountable.US.

The analysis of major oil companies’ financials shows that 11 of the group gave payouts to shareholders worth more than $36.5bn collectively this year, while a dozen bought back $8bn-worth of stock. This apparent focus, rather than on further drilling, has caused some frustration within the federal government, with Jennifer Granholm, the US energy secretary, stating that “the oil and gas companies are not flipping the switch as quickly as the demand requires.”

A glut of new oil drilling has made the US awash with oil in recent years, turning the country into a top-level exporter as well as domestic supplier, but this has kept prices low to the displeasure of investors. “A lot of this has been driven by investor sentiment,” said Helima Croft, head of global commodity strategy at RBC Capital Markets, of the current reluctance to expand production. “They don’t want them to spoil the party.”

The situation has left the White House in an awkward position with its commitments to rapidly reduce planet-heating emissions, with environmentalists furious at administration attempts to expand drilling.


It sounds like you want the federal government to take over the oil and gas industry.
 
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lurkerlion

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Aug 2, 2011
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With the current politics:

1) institutional investors are prevented from investing in oil due to social scoring
2) banks are discouraged from lending in oil due to fed policies
3) major companies are required to invest in green to improve their social score
4) pipeline construction is a pipedream (pun intended)
Result: investment in drilling has been slowed down and production falls as wells decline just like liberal policy wants

2nd result: since oil is priced by international markets, our reduced production helped to increase prices. Since American companies are discouraged from reinvesting in drilling, they are are showing big profits by selling old oil at new prices. BUT no new drilling means the future of those companies shrinks—just like AOC and the Green Weenies want. BUT it also means ever increasing oil prices and dependence on OPEC.

Is the new normal or do we vote the crazies out? Rational transition to green will take decades not months.
 

2lion70

Well-Known Member
Gold Member
Jul 1, 2004
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It sounds like you want the federal government to take over the oil and gas industry.
Just one of the primary reasons gas prices went up.
Gaqsbuddy is showing a decline in gas prices over the last month. That trend is likely to continue.
 

junior1

Well-Known Member
May 29, 2001
6,120
6,437
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oil and gas companies have shown little willingness so far to ramp up production to help reduce costs and the new report, by the government watchdog group Accountable.US, accuses them of “taking advantage of bloated prices, fleecing American families along the way” amid ongoing fallout from the Covid-19 pandemic.

“Americans looking for someone to blame for the pain they experience at the pump need look no further than the wealthy oil and gas company executives who choose to line their own pockets rather than lower gas prices with the billions of dollars in profit big oil rakes in month after month,” said Kyle Herrig, president of Accountable.US.

The analysis of major oil companies’ financials shows that 11 of the group gave payouts to shareholders worth more than $36.5bn collectively this year, while a dozen bought back $8bn-worth of stock. This apparent focus, rather than on further drilling, has caused some frustration wi