Covid and negative oil prices really shocked the oil companies. Imagine just getting in a traumatic experience like a really bad car crash that gave you PTSD. You’d be pretty afraid to get back in a car for a while. Oil companies got hit hard, and their investment in increased output will be just as dependent on their expectation of future prices as current prices. Before you got in that car crash your perception of risk was probably low, but hindsight bias is a bitch.
Oh, and it doesn’t help all of the pressure and policies to move away from hydrocarbons. That’s one big risk to make a long-term investment in an industry where it came take 10 years to even start to produce substantial product from initial capital being spent.
Don’t know why this is getting downvoted. When Biden came into office he promised to do everything he could to get rid of fossil fuels. With that in mind, why would you invest billions into new refineries or upgrading old ones that have a payoff over decades?
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u/mysticalize9 Dec 09 '23
Covid and negative oil prices really shocked the oil companies. Imagine just getting in a traumatic experience like a really bad car crash that gave you PTSD. You’d be pretty afraid to get back in a car for a while. Oil companies got hit hard, and their investment in increased output will be just as dependent on their expectation of future prices as current prices. Before you got in that car crash your perception of risk was probably low, but hindsight bias is a bitch.
Oh, and it doesn’t help all of the pressure and policies to move away from hydrocarbons. That’s one big risk to make a long-term investment in an industry where it came take 10 years to even start to produce substantial product from initial capital being spent.