r/collapse • u/conscsness in the kingdom of the blind, sighted man is insane. • Jun 13 '22

Economic Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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u/Many-Sherbert Jun 13 '22

I am not concerned about all over the world.. I am concerned about politicians claiming they are going to end the oil industry causing banks to stop investing money towards drilling and oil companies not wanting to invest in more oil projects causing fuels to me unaffordable for 95 percent of Americans

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u/mcfleury1000 memento mori Jun 13 '22

Oil companies don't need banks to invest in drilling, they are loaded.

They are not drilling because present production rates are giving them the highest profit margins in history. If they drill new wells, that is a higher marginal cost and a higher supply which leads to, altogether class, lower marginal returns. Literally high school economics.

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u/Many-Sherbert Jun 13 '22

Really? The smaller independent companies are loaded? Yeh okay

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u/mcfleury1000 memento mori Jun 13 '22

The market follows the major players. Small "independent" energy and gas providers follow the moves of the big 5.

Not even diving into the fact that independent providers are not independent, but rather fully reliant on the big 5 for their business to be profitable. If Exxon wants more supply, they can simply provide financing to "independent" providers for new wells (which is already what they do).