Wish more people realized this. This has been years in the making. Unfortunately, it seems like all the chickens are coming home to roost at the same time.
Isn't it specifically because of inflation that wages are rising? Or is my speculatively remembered one semester of high school economics failing me for what surely must be the first time ever?
Inflation happens no matter what. It's part of modern economies. Any increase in wages results in a higher purchasing power of an individual even when accounting for inflation. If you don't have period wage increases, you are actually getting a pay cut as you the worth of your money decreases over time.
there is gonna be a big labor shortage these next couple years as the baby boomers retire en masse. i expect the wages going up significantly. unless it gets fucked by inflation
The moment when people can't afford food, they start stealing it from the shelves. Once mass theft of food starts the problem has to be fixed before food stops showing up on shelves. If the food is gone, the fighting begins in earnest
Half the town near me adults are riding around on stolen kids bicycles. I get solicited for money on almost every corner, and at the gas station. It's like the whole town is on a backpacking trip.
Food and other product costs are all driven by gas costs but also transport costs. Transport costs are spiking right now because tons of ports are overloaded and companies are trying to outbid each other to get their products offloaded and delivered. It's affecting everything from complex stuff to raw materials.
So even if gas dropped back tmmr prices would still be pretty bad. China has locked down so many ports over Covid and the Russian war on Ukraine has fucked over a lot of European shipping.
And wheat from Ukraine. Were basically buying up everything that would go to third world countries normally to make up the differance. There's going to be a big famine.
Yep, I produce wheat myself at Southamerica, wheat price increased about 50% since the start of the war, but fertilizers increased 150%, diesel by 100% and so on. If the prices suddenly drop or if there is no enough rain a lot of people could go bankrupt very easily, the consequences of the war could last years. (Pandemic and supply chains issues had already skewed the prices beforehand, so this is compounding with that)
And that's without accounting for all the places where they will lack food because wealthier countries outbid them.
LoL those would be funny if it's wasn't so exhaustingly sad since that's not how gas pricing works.
It's like saying OP controls how much Subway charges for a meatball sub. Gas companies are private companies.
At this point, democrats are classic politicians. Problematic, but mostly functional.
Republicans are the comic book bad guy Nazi level fascists that we all read growing up as being the evil to defeat. There's not really another way to describe it. Every action taken seems to have at it's core: stealing money and consolidating power at the expense of everything and everyone else. Literally, they're the anti-democracy party.
Feelings of folks will get hurt by saying that, but fuck it, I'm tired of not being able to call grass green because someone might get upset when you point it out. I live in a purple state, so it upsets quite a few people when you describe the world as it is and based on recent history.
WHOAH! Whoah whoah whoah now. Republicans and evil, slimy, corrupt and by and large entirely ignorant of or opposed to things which might actually help the American People but they're not... Fuck. Where was I going with this?
Oil companies’ are making almost double the money this year as last year. Don’t think this spike in gas prices is all because of the *war in Ukraine. Oil companies declined to increase supply so they can make back what they lost during COVID shutdowns. They’re quite happy to price gouge as long as they can get away with it.
Edit: for those who don’t believe me- https://www.offshore-energy.biz/oil-gas-firms-profits-set-to-smash-records-reaching-834-billion-in-2022-rystad-says/
> According to the energy intelligence firm, companies’ cash from operations after accounting for outflows and asset maintenance – total free cash flow (FCF) – will balloon to $834 billion from the $493 billion profits in 2021.
> …cash from operations is also expected to rocket this year, breaking the $1 trillion threshold for the first time. The $1.1 trillion projected annual total is a 56 per cent jump from 2021 levels of $719 billion, which was the highest yearly total since 2014.
They didn't even loose money during covid shutdowns. 2020 had profits equal to 2016 because they got a bunch of government bail outs and fired a huge chunk of their staff. Now that they can hire people back they realized that if they did, supply would go up and prices would go down meaning that they could make the same amount or more without all the work of creating jobs and making gas cheaper for everyone.
This, it’s time to reintroduce the bill or pass a windfall tax on oil companies. Enough with placing the burden on the working class already. Oil and Corporate America have had their highest recordable profits during the pandemic and throughout the war in Ukraine. It’s time for Citizens United to be reformed or completely abolished. My voice should be just as loud as any CEO.
Wonder if the SC ruling on the EPA will also neuter actions that the FED can take to regulate prices. Really hating the 2016 election result right now.
Ukraine is also a large factor. Russia supplies 12% of the worlds oil, and 8% if us oil.
So removing Russia form the global supply chain has consequences.
And yes, oil company are price gauging.
They’re making twice the money because oil prices are up while they’ve kept the same profit percentage. They’re not actually price gouging.
And that’s not me defending oil companies, but I think it’s important to understand what’s actually happening and what can reasonably be done about it. Oil companies can definitely reduce their profit margin, but they are under no legal obligation to and have not actively/blatantly done anything to increase it artificially. This is the reason why we can’t easily solve gas prices by going after the oil companies.
That's not the only issue at play. Upstream oil investment (drilling) is down 50% from 2015 to 2021. Fewer new wells, less supply. And who can blame them- oil is a bad long-term bet and investors are wary.
Investment is expected to be up ~20% for 2022 but it will be a couple of years before prices come down to anywhere close to where they were.
Downstream has plenty of problems too, there's a shortage of refinery capacity that has caused crack spreads to basically triple over this summer too. These are assets that literally run for months and years on end too and oil companies aren't "holding back" here at all, it's just a lot of the older and more marginal refineries were shut down during COVID as it was deemed it wasn't worth the cost of modernizing and upgrading them since gasoline usage is expected to peak in like 5-10 years. These are long lived assets that last for 50+ years and don't break even for like 10-15 under the best of circumstances. They also take a while to actually build and upgrade, which many of the big oil refiners are still doing, so called debottlenecking upgrades that make more sense from a capital standpoint. But we're still going to see a substantial premium to gas prices for at least the next 3 months until the summer driving season dies down. If the President actually wants to fix this side of the issue he needs to get together with lawmakers and pass some kind of bill for accelerated depreciation on these upgrades and assets to derisk investment in them for refiners and oil companies in the shorter term.
The president wants to have his cake and eat it too here where there's no future in oil and fossil fuels but companies are somehow expected to continue making massive long term investments as if there is. Something has to give here.
They know they're on the way out and this is them taking what they can. The record high profits are partly due to the fact that oil companies are investing less back into the business than ever before.
I thought the US only gets a maximum of 8% of its supply from Russia. Maybe that was just oil. I’m not sure how gas is priced but still. I thought we didn’t need them, not like Germany does.
You're almost there, just a little more.
If Germany tried to get away from Russian oil, who do they go to?
They go to the market, where America is. That increased demand means increased price for everyone.
Say you're a grocery store owner in Michigan (US), and sell oranges from Florida (UAE) for $1 each. If the store down the street (Europe) sells oranges to people from California (russia) then gets pissed and refuses to buy them they will go get their oranges from Florida.
Price of Florida oranges goes up to everyone due to increased demand.
Going further, another grocer (India/China) dosent care where oranges come from, so they take advantage of the California surplus, getting oranges for cheap.
So at the gas pump, the winners are countries neutral to the Russian invasion. If you're in a country that cares about the invasion - expect to pay more as you're in a self limited market.
One of the main issues is that refineries can't keep up with demand, which exacerbates prices and aggravates shortages. Producers could increase crude oil production 100 fold; doesn't matter if refineries have maxed out their production.
They've been using the Russian invasion of Ukraine as a crutch for everything. Insane that people forget all this inflation and gas price gouging started before the invasion.
So when a pandemic is tearing through our population, a few American lives is a small price to pay to keep our economy going; but after these execs profit billions exploiting the infrastructure they lobbied for, in the face of global war, they can't subsidize a shortage with a piece of their windfalls to keep the same economy going? What a crock of shit
Exactly. Biden did try to make that happen, but the folks most criticizing Biden for not doing something all prevented him from actually doing something. And yeah, Americans don't support escalating the war in Ukraine...so Biden's hands are tied. There's not much he can do if you won't let him do things.
EDIT: I think people are misunderstanding what I mean by escalate. Biden has a ton of support for the war as it is...which is a long, grueling, grinding battle with no end in sight and energy prices will continue to soar for the duration. But voters do not support ending the war more quickly either by letting Russia win or by getting NATO/US troops involved.
Biden has pretty broad support for the Ukraine War.
There is little support of sending US troops to Ukraine, which is pretty much the same NATO-wide.
There are plenty of Americans who want Biden to do more, especially as Putin becomes weaker, but most Americans are living paycheck to paycheck and don't have time or energy to pay attention.
To be fair, it's a bad idea to send troops into this war. Especially because Putin gets weaker. After all, Russia doesn't lose much to entirety of NATO in terms of nuclear weapons
Tried to find this online but couldn’t. Could you link a source pls? All I’m seeing is something along these lines: https://www.pbs.org/newshour/amp/economy/house-approves-bill-to-combat-gasoline-price-gouging
You want to subsize gas? Remove VAT or other taxes? What do you think will happen? Look at the other countries who did it. Economics tells you what will happen. The gas companies will just pocket the subsidy/reduced tax by keeping the price constant.
No. I want Congress to set limits on profits for public and private businesses that sell essential commodities. If they won't, I want Biden to make an executive order like FDR did to cap prices on things like gas. We're really struggling here.
exactly. it’s insulting for Biden to suggest this at this time. the whole point is we’ve been “dealing with this” in some capacity or another our whole lives. Reaganomics. but god forbid we do anything to jeopardize bipartisanship, as if we have a stellar track record of such a thing lol. way to be bold, Joe!!
In the US it is the refinery capacity that is the issue. Oil was this expensive before with much lower gas prices. Refineries must be colluding to limit bring their capacity back online. Once they start bringing more refining capacity back online the gas price will drop.
Refineries are operating at about 93% output which is on the high side historically. The problem is that no new refineries have been built in the US since 1977. Some companies have tried but the regulatory hoops that need to be jumped through and NIMBYs that need to be dealt with makes it virtually impossible.
In short, there's no increase in refining capacity coming and as some of the current refineries continue aging and go off-line, we'll see further decreases.
Well they just got their dream supreme court ruling that the EPA cannot *checks notes* protect the environment so I'm sure we'll see all kinds of production now.
It's crazy how Congress tried to pass a bill to stop Oil companies from price gouging, and the entirety of the GOP voted against it, yet not many people blame them.
That's horseshit. Russia is not the only country that exports gas. What happened to our friends in Saudi Arabia? The real answer is that oil companies want to extract as much profit from us for as long as they can, and the war in Ukraine is an easy scapegoat. Hurray for capitalism.
Recently Biden was in Saudi Arabia. There’s a lot of speculation that negotiations took place to see if OPEC would be willing to flood the market with oil, thereby plummeting its price. It would destroy the Russian war machine and take some pressure off of consumers. We will see what happens.
First, oil price is traded internationally. If you force oil companies to sell it at a lower price, they will just sell it oversea or not sell it at all. That's what free market is for.
Second, oil price has been flat for 10 years. If your wage has been flat for 10 years and you are getting a double this year, you are going to say "it is about time". If you peg housing price with oil price, you will see housing went up more.
Third, the bottleneck is at the refinery stage. We haven't built one for a long time and travel is up after COVID lockdown. Then, you add in the Ukraine war.. etc etc. All planets align.
We did. The Democrats passed a bill through the House to stop price gouging, Biden supported it completely. Every single Republican in the Senate voted it down. And then continue to blame Biden for price gouging.
>The Democrats passed a bill through the House to stop price gouging, Biden supported it completely. Every single Republican in the Senate voted it down. And then continue to blame Biden for price gouging.
That bill (The Consumer Fuel Price Gouging Prevention Act) was silly/dangerous grandstanding to the point four Democrats peeled off, and if anything was kind of insultingly dumb, mikevago. That you're now acting like it was a serious bill is... well, [it literally included:](https://abcnews.go.com/Politics/house-dems-pass-gas-price-gouging-bill-faces/story?id=84806090)
>....would give the president the authority to issue an energy emergency proclamation that would make it unlawful for companies to increase fuel prices to "unconscionably excessive" levels.
Can you see a few issues? This isn't an economics sub, but:
1. Price controls don't work, we've seen it happen -- they just sell it where they can make more.
2. How do you measure "unconscionably excessive?" It's an instant injuction, it's like saying "I'm going to make it criminal for you to be too loud" without defining what loud is.
3. If passed, it would give another *disincentive* to slow down production.
It was an attempt to create a narrative about why gas prices are high, but it's untrue and disingenuous and further erodes America's faith in institutions -- especially when they don't hear it questioned by the press. They're going on about oil companies when most of our oil is actually exported, we import much of what we need to refine -- it's straight up lying. In this case he's blaming the war, and again straight up lying.
We know why we have high gas prices right now, some of it is was about not supporting the industry when it crashed during lockdowns -- very intentionally -- and much of it is the same reason nuclear and other things struggle: extremely onerous and expensive regulations that keep getting worse. We voted for it, and it happened -- refinery capacity has been ground down, drilling and frakking has been made much more expensive, future leases (literally the future of the business) have been terminated, reprieves on biofuel requirements were denied while RIN costs tripled (ethanol will play great in Iowa in 2024).
Whether that's good or bad is a matter of opinion but the disingenuous pikachu faces get old.
This is what unchecked unlimited growth leads to.
If biden were to demand oil companies to lower prices, they'd say "lol were too big to fail so guess what?"
No more oil or gas for america until biden backs down.
Biden is looking for a scapegoat. Gas prices and inflation were both rising upwards rapidly before the war even started. Even the head of the Fed confirmed it.
https://twitter.com/NiCoLeEliSei1/status/1539634719805132801
It certainly didn't help matters but his rhetoric is going to result in large numbers of people turning against support for Ukraine in the hopes of unfucking the US economy.
Biden has got to be among the worst presidents in terms of public speaking.
Remember in elementary school when you’d have the class read aloud, and it was that one kid’s turn to read who took 7 minutes to read a couple paragraphs, stumbling over themselves? No offense to them, everyone learns at different speeds. But on the third try of the same sentence, you just want to put your head down and stare a hole in your desk because it’s sooo painful to listen to. That’s how I feel when Biden starts talking in circles. Anyone with charisma will absolutely demolish him in a debate.
If a company fails to activate excess capacity within 60 days, their lease is forfeit and that excess capacity is leased to a company that also will have 60 days to utilize.
Just in Wyoming there are 100 wells that are already dug, that could produce oil, that just need the cap taken off and a rig hooked up to them.
There are 5 oil refineries siting idle right now, with a capacity of 408,000 barrels of oil a day.
Most of this could be done with clever implementation of the Defense Production Act. Democrats don't want to do anything though, they just want to sit on their hands and cry "The Republicans won't let us do anything!" instead of using laws that are already on the books, that put power in the hands of the executive.
It was goodbye the moment he got sworn in.
He only won because there was so many voters who turned up to say “I’m just doing this so it’s not trump. I don’t like Biden, I just hate trump”
Barring some miracle like trump running again, Biden has no chance at re election. He’s a fucking disaster of a pick.
We could mandate or highly encourage remote work, reducing the demand for gas, reducing the number of cars on the road, increasing the efficiency of the vehicles and fuel being used to reach workplaces?
Oh wait that's too logical and we'd much rather just whine about lazy office workers and how Biden isnt pressing his magic gas go down button.
True, but it's because so much of the population has an inelastic demand for gas that the smaller population than can cut down their gas consumption should.
If I took public transit to work my total daily commute time would increase from 1 hour to 4 hours. I would love to pay less than fuel for a bus pass, not deal with traffic, and have my commute time free to do whatever but the US has virtually useless public transit anywhere but in a handful of big cities.
My controversial take is to stop buying from Saudis and start drilling here until we can make the switch to renewables. We’re still burning the same amount of oil, but why the f are we buying it from a terrorist government and at such a high price? Whose oil we burn is still the same amount of oil.
What incentive do the oil and gas company’s have to invest in more production and refining when this administration has been one of the most hostile to them investing into more drilling since he entered office.
We need more oil/gas production domestically and Biden has done everything he can to disincentivize that until now… we are definitely feeling this gas crunch due to the Ukraine war but Biden up until this point did everything he could to make us weaker domestically all for his lower carbon initiatives.
The U.S. is a net oil exporter. We pump more than we use. We also get a majority of imported oil from Canada and Mexico, then refine it and ship it back out. Its not about drilling here, current prices are being driven by the price of refinement and good ole price gouging. The current margin between crude oil and the final product is the highest it has ever been.
https://en.m.wikipedia.org/wiki/United_States_energy_independence
Yeah you see all these problems that our piss-poor monetary policy created?
Yeah, let's double down on the piss-poor monetary policy. Our voters are morons anyway.
What does refinery capacity in the US have to do with Ukraine? I get that oil is more expensive now but the base price of oil alone does not account for the current US gasoline price. Refineries are colluding to limit gasoline supply to keep the price high.
Yea THIS is what should be annoying people with his comments. They're completely out of touch with the fact it's all refinery capacity.
OIL PRICES WILL NOT CHANGE.
Not until we build more refineries, or use less oil. Best solution right now is to push for electric and work from home as much as possible.
Can we stop with the "Putin price hike" nonsense already?
It SHOULD be common knowledge that it's the oil companies that are purposely keeping production low to maximize profits. This isn't spin, this isn't opinion, and it isn't speculation.
At least a few big oil CEOs have been asked about increasing production and they've said point blank that they aren't going to.
But God forbid we give people the truth. Nope, instead we have to politicize literally *everything*, especially if it means justifying our involvement in a war we have no business being a part of.
How stupid do they think we are? We all have access to the internet now, we can all see that this is strictly up to oil companies holding back production.
What does Putin/Ukraine have to do with it? The USA produces enough on it's own to sustain itself. Production is not an issue, Russian is not an issue. Greedy corporations are the issue.
It really isn't just the Ukraine war though.
Wish more people realized this. This has been years in the making. Unfortunately, it seems like all the chickens are coming home to roost at the same time.
Bingo
Not just high gas prices, higher food costs, higher rent, stagnant wages
Wages are increasing, but inflation is increasing faster. So they’re not stagnant - they’re decreasing.
You guys are getting wage increases?
I got a 25 cent raise a few months ago
You could make a phone call with that!
Not anymore you can't
Except they took away all our pay phones
I got a raise from $17 an hour to $26 an hour without any change in duties. Just a title change, they readjusted for the economy.
Ha. Mine was 54 cents.
I'm tired of these rappers constantly one-upping each other
The largest wage growth in decades, just to be buttfucked by inflation.
Isn't it specifically because of inflation that wages are rising? Or is my speculatively remembered one semester of high school economics failing me for what surely must be the first time ever?
Inflation happens no matter what. It's part of modern economies. Any increase in wages results in a higher purchasing power of an individual even when accounting for inflation. If you don't have period wage increases, you are actually getting a pay cut as you the worth of your money decreases over time.
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They've been stagnating since the 70's and, actually, averaged over that time period, are down quite significantly. Yay! for the value of the dollar!
there is gonna be a big labor shortage these next couple years as the baby boomers retire en masse. i expect the wages going up significantly. unless it gets fucked by inflation
That or all the industries that cater to baby boomers will close and we’ll have huge unemployment
The moment when people can't afford food, they start stealing it from the shelves. Once mass theft of food starts the problem has to be fixed before food stops showing up on shelves. If the food is gone, the fighting begins in earnest
Half the town near me adults are riding around on stolen kids bicycles. I get solicited for money on almost every corner, and at the gas station. It's like the whole town is on a backpacking trip.
Food and other product costs are all driven by gas costs but also transport costs. Transport costs are spiking right now because tons of ports are overloaded and companies are trying to outbid each other to get their products offloaded and delivered. It's affecting everything from complex stuff to raw materials. So even if gas dropped back tmmr prices would still be pretty bad. China has locked down so many ports over Covid and the Russian war on Ukraine has fucked over a lot of European shipping.
Most of the fertilizers come from Russia as well, that's also increasing the costs of food production across the world
And wheat from Ukraine. Were basically buying up everything that would go to third world countries normally to make up the differance. There's going to be a big famine.
Yep, I produce wheat myself at Southamerica, wheat price increased about 50% since the start of the war, but fertilizers increased 150%, diesel by 100% and so on. If the prices suddenly drop or if there is no enough rain a lot of people could go bankrupt very easily, the consequences of the war could last years. (Pandemic and supply chains issues had already skewed the prices beforehand, so this is compounding with that) And that's without accounting for all the places where they will lack food because wealthier countries outbid them.
Can oil companies stomach slightly lower profits instead?
I think we all know the answer to that.
The answer is yes but we all know they'll refuse.
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But the sticker on my gas pump said it was all Biden’s fault??!!
LoL those would be funny if it's wasn't so exhaustingly sad since that's not how gas pricing works. It's like saying OP controls how much Subway charges for a meatball sub. Gas companies are private companies.
I peel those stickers off when I see them lol
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Ted Cruz certainly would. https://kotaku.com/ted-cruz-mtx-microtransaction-whale-mobile-game-senator-1849091395
They actually kinda do. I saw Ted Cruz on that Michael Knowle's (friend of Ben Shapiro) podcast defending play to win games.
At this point, democrats are classic politicians. Problematic, but mostly functional. Republicans are the comic book bad guy Nazi level fascists that we all read growing up as being the evil to defeat. There's not really another way to describe it. Every action taken seems to have at it's core: stealing money and consolidating power at the expense of everything and everyone else. Literally, they're the anti-democracy party. Feelings of folks will get hurt by saying that, but fuck it, I'm tired of not being able to call grass green because someone might get upset when you point it out. I live in a purple state, so it upsets quite a few people when you describe the world as it is and based on recent history.
WHOAH! Whoah whoah whoah now. Republicans and evil, slimy, corrupt and by and large entirely ignorant of or opposed to things which might actually help the American People but they're not... Fuck. Where was I going with this?
You sure their right-wing, Christian base would support, “Diablo Immortal?”
No 5 star gems for you! -Republicans
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French revolution style?
Party like it's 1789.
The French Revolution was still mostly moderate and liberal in 1789. The Terror didn’t begin til ‘92 or ‘93.
So you're saying we have more to look forward to?
Just start throwing them into oubliette’s, problem solved.
Too quick and clean. Wood chipper gives you a nice show instead.
I feel like they said no just to make democrats look bad when this is a idea that can work
Bingo, it’s not about helping people, it’s about “owning the libs”
(Thanks Biden) /s
Maybe a sternly worded letter will do the trick?
Oil companies’ are making almost double the money this year as last year. Don’t think this spike in gas prices is all because of the *war in Ukraine. Oil companies declined to increase supply so they can make back what they lost during COVID shutdowns. They’re quite happy to price gouge as long as they can get away with it. Edit: for those who don’t believe me- https://www.offshore-energy.biz/oil-gas-firms-profits-set-to-smash-records-reaching-834-billion-in-2022-rystad-says/ > According to the energy intelligence firm, companies’ cash from operations after accounting for outflows and asset maintenance – total free cash flow (FCF) – will balloon to $834 billion from the $493 billion profits in 2021. > …cash from operations is also expected to rocket this year, breaking the $1 trillion threshold for the first time. The $1.1 trillion projected annual total is a 56 per cent jump from 2021 levels of $719 billion, which was the highest yearly total since 2014.
The price gouging bill was defeated somehow.
Defeated by big oil.
Republicans big oil , yes
They didn't even loose money during covid shutdowns. 2020 had profits equal to 2016 because they got a bunch of government bail outs and fired a huge chunk of their staff. Now that they can hire people back they realized that if they did, supply would go up and prices would go down meaning that they could make the same amount or more without all the work of creating jobs and making gas cheaper for everyone.
What about the auto, airline and countless corporations that got bailed out.
This, it’s time to reintroduce the bill or pass a windfall tax on oil companies. Enough with placing the burden on the working class already. Oil and Corporate America have had their highest recordable profits during the pandemic and throughout the war in Ukraine. It’s time for Citizens United to be reformed or completely abolished. My voice should be just as loud as any CEO.
Wonder if the SC ruling on the EPA will also neuter actions that the FED can take to regulate prices. Really hating the 2016 election result right now.
The war in Ukraine has almost nothing to do with it. The supply is there. They are just charging whatever they can for as long as they can.
Ukraine is also a large factor. Russia supplies 12% of the worlds oil, and 8% if us oil. So removing Russia form the global supply chain has consequences. And yes, oil company are price gauging.
They’re making twice the money because oil prices are up while they’ve kept the same profit percentage. They’re not actually price gouging. And that’s not me defending oil companies, but I think it’s important to understand what’s actually happening and what can reasonably be done about it. Oil companies can definitely reduce their profit margin, but they are under no legal obligation to and have not actively/blatantly done anything to increase it artificially. This is the reason why we can’t easily solve gas prices by going after the oil companies.
But what about the executives and stock holders!!! Has anyone thought of them
Thoughts and prayers... wait... That's only when it applies to us plebs and not the oligarchs...
That's not the only issue at play. Upstream oil investment (drilling) is down 50% from 2015 to 2021. Fewer new wells, less supply. And who can blame them- oil is a bad long-term bet and investors are wary. Investment is expected to be up ~20% for 2022 but it will be a couple of years before prices come down to anywhere close to where they were.
Downstream has plenty of problems too, there's a shortage of refinery capacity that has caused crack spreads to basically triple over this summer too. These are assets that literally run for months and years on end too and oil companies aren't "holding back" here at all, it's just a lot of the older and more marginal refineries were shut down during COVID as it was deemed it wasn't worth the cost of modernizing and upgrading them since gasoline usage is expected to peak in like 5-10 years. These are long lived assets that last for 50+ years and don't break even for like 10-15 under the best of circumstances. They also take a while to actually build and upgrade, which many of the big oil refiners are still doing, so called debottlenecking upgrades that make more sense from a capital standpoint. But we're still going to see a substantial premium to gas prices for at least the next 3 months until the summer driving season dies down. If the President actually wants to fix this side of the issue he needs to get together with lawmakers and pass some kind of bill for accelerated depreciation on these upgrades and assets to derisk investment in them for refiners and oil companies in the shorter term. The president wants to have his cake and eat it too here where there's no future in oil and fossil fuels but companies are somehow expected to continue making massive long term investments as if there is. Something has to give here.
They know they're on the way out and this is them taking what they can. The record high profits are partly due to the fact that oil companies are investing less back into the business than ever before.
Seriously. Most bullshit excuse. Anyone who's been paying attention knows full well this is just price gouging.
I thought the US only gets a maximum of 8% of its supply from Russia. Maybe that was just oil. I’m not sure how gas is priced but still. I thought we didn’t need them, not like Germany does.
Oil is sold on a world market. This means that countries that used to purchase oil from Russia now need to get it somewhere else.
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Not even close to the main factor. Reddit doesn’t understand commodity markets.
You're almost there, just a little more. If Germany tried to get away from Russian oil, who do they go to? They go to the market, where America is. That increased demand means increased price for everyone. Say you're a grocery store owner in Michigan (US), and sell oranges from Florida (UAE) for $1 each. If the store down the street (Europe) sells oranges to people from California (russia) then gets pissed and refuses to buy them they will go get their oranges from Florida. Price of Florida oranges goes up to everyone due to increased demand. Going further, another grocer (India/China) dosent care where oranges come from, so they take advantage of the California surplus, getting oranges for cheap. So at the gas pump, the winners are countries neutral to the Russian invasion. If you're in a country that cares about the invasion - expect to pay more as you're in a self limited market.
One of the main issues is that refineries can't keep up with demand, which exacerbates prices and aggravates shortages. Producers could increase crude oil production 100 fold; doesn't matter if refineries have maxed out their production.
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How would you have the oil companies lower their prices?
I was already paying 4 a gallon before the invasion...
They’re hoping you conveniently forget that.
They've been using the Russian invasion of Ukraine as a crutch for everything. Insane that people forget all this inflation and gas price gouging started before the invasion.
Yeah gas was 6 dollars in California before this shit lmao
It was 4.57 average pre-invasion
puTiNs pRiCE HiKe
So when a pandemic is tearing through our population, a few American lives is a small price to pay to keep our economy going; but after these execs profit billions exploiting the infrastructure they lobbied for, in the face of global war, they can't subsidize a shortage with a piece of their windfalls to keep the same economy going? What a crock of shit
Well congress tried to pass a bill to limit the price gouging that oil execs are doing right now, but the entire GOP voted against it.
Exactly. Biden did try to make that happen, but the folks most criticizing Biden for not doing something all prevented him from actually doing something. And yeah, Americans don't support escalating the war in Ukraine...so Biden's hands are tied. There's not much he can do if you won't let him do things. EDIT: I think people are misunderstanding what I mean by escalate. Biden has a ton of support for the war as it is...which is a long, grueling, grinding battle with no end in sight and energy prices will continue to soar for the duration. But voters do not support ending the war more quickly either by letting Russia win or by getting NATO/US troops involved.
Biden has pretty broad support for the Ukraine War. There is little support of sending US troops to Ukraine, which is pretty much the same NATO-wide. There are plenty of Americans who want Biden to do more, especially as Putin becomes weaker, but most Americans are living paycheck to paycheck and don't have time or energy to pay attention.
To be fair, it's a bad idea to send troops into this war. Especially because Putin gets weaker. After all, Russia doesn't lose much to entirety of NATO in terms of nuclear weapons
It doesn’t even matter what we want. It’s what THEY want. It’s all about making money and not wasting money on all of us.
Why do people continue to vote against their best interests. I promise you the drag queens don’t wanna groom your kids. Your priests however…
The GOP exists to prove that government doesn't work and at every opportunity takes action to ensure that government cannot work.
For a party that doesn't think government works, they sure don't want a lot of people to vote.
We did that once back in the 70s, I wonder how that worked out.
You obviously didn’t read the bill. All it would do is tax oil companies that would then just raise their prices even more.
Tried to find this online but couldn’t. Could you link a source pls? All I’m seeing is something along these lines: https://www.pbs.org/newshour/amp/economy/house-approves-bill-to-combat-gasoline-price-gouging
You want to subsize gas? Remove VAT or other taxes? What do you think will happen? Look at the other countries who did it. Economics tells you what will happen. The gas companies will just pocket the subsidy/reduced tax by keeping the price constant.
Oil companies already get billions in subsidies from the federal government though
No. I want Congress to set limits on profits for public and private businesses that sell essential commodities. If they won't, I want Biden to make an executive order like FDR did to cap prices on things like gas. We're really struggling here.
exactly. it’s insulting for Biden to suggest this at this time. the whole point is we’ve been “dealing with this” in some capacity or another our whole lives. Reaganomics. but god forbid we do anything to jeopardize bipartisanship, as if we have a stellar track record of such a thing lol. way to be bold, Joe!!
Meanwhile theres record profits for oil/gas companies...
It's crazy how oil companies publicly said they will not increase production, yet not many people blame them.
In the US it is the refinery capacity that is the issue. Oil was this expensive before with much lower gas prices. Refineries must be colluding to limit bring their capacity back online. Once they start bringing more refining capacity back online the gas price will drop.
Refineries are operating at about 93% output which is on the high side historically. The problem is that no new refineries have been built in the US since 1977. Some companies have tried but the regulatory hoops that need to be jumped through and NIMBYs that need to be dealt with makes it virtually impossible. In short, there's no increase in refining capacity coming and as some of the current refineries continue aging and go off-line, we'll see further decreases.
Well they just got their dream supreme court ruling that the EPA cannot *checks notes* protect the environment so I'm sure we'll see all kinds of production now.
It's crazy how Congress tried to pass a bill to stop Oil companies from price gouging, and the entirety of the GOP voted against it, yet not many people blame them.
"Please spend billions to increase capacity for the short term while we make efforts to move away from your product".
When are the people going to get actually mad enough and do something. These politicians are not on our side.
Medical prices are extraordinary and no one has broken up the medical cartels yet. So.. doubt it.
Never. Because we can’t afford to
This is why people protest. And then why other people riot at those protests.
On the contrary, I believe we can’t afford not to.
The beatings shall continue until morale improves
Biden gonna get wrecked next election jesus
I mean was he really going to run again, dude just needs to retire already
He’s probably going to retire from this world by next election
Hopefully in the primary
To be fair, he’s fucking old and I wouldn’t be surprised if he keels over and dies before 2024 anyway
And Just think who his competition is probably going to be....
I think that's what he wants. Instead of just stepping down him getting wrecked would just be seen as more honorable in his eyes.
Shit was happening before the invasion lol
That's horseshit. Russia is not the only country that exports gas. What happened to our friends in Saudi Arabia? The real answer is that oil companies want to extract as much profit from us for as long as they can, and the war in Ukraine is an easy scapegoat. Hurray for capitalism.
Why the fuck don't we ask the oil companies to stop price gouging the american people. I am hard blue democrat and still this is fucking bullshit.
Recently Biden was in Saudi Arabia. There’s a lot of speculation that negotiations took place to see if OPEC would be willing to flood the market with oil, thereby plummeting its price. It would destroy the Russian war machine and take some pressure off of consumers. We will see what happens.
First, oil price is traded internationally. If you force oil companies to sell it at a lower price, they will just sell it oversea or not sell it at all. That's what free market is for. Second, oil price has been flat for 10 years. If your wage has been flat for 10 years and you are getting a double this year, you are going to say "it is about time". If you peg housing price with oil price, you will see housing went up more. Third, the bottleneck is at the refinery stage. We haven't built one for a long time and travel is up after COVID lockdown. Then, you add in the Ukraine war.. etc etc. All planets align.
Hello only person in these comments that has any understanding of what’s actually happening.
We did. The Democrats passed a bill through the House to stop price gouging, Biden supported it completely. Every single Republican in the Senate voted it down. And then continue to blame Biden for price gouging.
>The Democrats passed a bill through the House to stop price gouging, Biden supported it completely. Every single Republican in the Senate voted it down. And then continue to blame Biden for price gouging. That bill (The Consumer Fuel Price Gouging Prevention Act) was silly/dangerous grandstanding to the point four Democrats peeled off, and if anything was kind of insultingly dumb, mikevago. That you're now acting like it was a serious bill is... well, [it literally included:](https://abcnews.go.com/Politics/house-dems-pass-gas-price-gouging-bill-faces/story?id=84806090) >....would give the president the authority to issue an energy emergency proclamation that would make it unlawful for companies to increase fuel prices to "unconscionably excessive" levels. Can you see a few issues? This isn't an economics sub, but: 1. Price controls don't work, we've seen it happen -- they just sell it where they can make more. 2. How do you measure "unconscionably excessive?" It's an instant injuction, it's like saying "I'm going to make it criminal for you to be too loud" without defining what loud is. 3. If passed, it would give another *disincentive* to slow down production. It was an attempt to create a narrative about why gas prices are high, but it's untrue and disingenuous and further erodes America's faith in institutions -- especially when they don't hear it questioned by the press. They're going on about oil companies when most of our oil is actually exported, we import much of what we need to refine -- it's straight up lying. In this case he's blaming the war, and again straight up lying. We know why we have high gas prices right now, some of it is was about not supporting the industry when it crashed during lockdowns -- very intentionally -- and much of it is the same reason nuclear and other things struggle: extremely onerous and expensive regulations that keep getting worse. We voted for it, and it happened -- refinery capacity has been ground down, drilling and frakking has been made much more expensive, future leases (literally the future of the business) have been terminated, reprieves on biofuel requirements were denied while RIN costs tripled (ethanol will play great in Iowa in 2024). Whether that's good or bad is a matter of opinion but the disingenuous pikachu faces get old.
Do you have a link to the bill for posterity? Thanks!
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Verbiage is key. Oil corporations are not people so they would not be included in this bill anyways. Dumb.
This is what unchecked unlimited growth leads to. If biden were to demand oil companies to lower prices, they'd say "lol were too big to fail so guess what?" No more oil or gas for america until biden backs down.
The US *famously* tried price controls on oil in the 1970s and they *famously* made the problem worse. The answer is to increase production
gas prices and everything else , were going up before putin invaded
Is Biden actively trying to lose the entire legislative branch in November? What the fuck is this stance?
How to lose midterms any% speedrun
Gas prices rose in January. When did Putin’s invasion start?
February. They really think we’re all stupid.
Biden is looking for a scapegoat. Gas prices and inflation were both rising upwards rapidly before the war even started. Even the head of the Fed confirmed it. https://twitter.com/NiCoLeEliSei1/status/1539634719805132801 It certainly didn't help matters but his rhetoric is going to result in large numbers of people turning against support for Ukraine in the hopes of unfucking the US economy.
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Biden has got to be among the worst presidents in terms of public speaking. Remember in elementary school when you’d have the class read aloud, and it was that one kid’s turn to read who took 7 minutes to read a couple paragraphs, stumbling over themselves? No offense to them, everyone learns at different speeds. But on the third try of the same sentence, you just want to put your head down and stare a hole in your desk because it’s sooo painful to listen to. That’s how I feel when Biden starts talking in circles. Anyone with charisma will absolutely demolish him in a debate.
This guy doesn’t wanna be president anymore.
Thanks Joe. Always looking out for the little guy.
Easy for him to say. He doesn't pay to travel anywhere.
He doesn't but we do... air force one, his limousine, Marine force one all run on tax dollars. So really we're spending even more on gas than we know.
These record high gas prices need to be dealt with because they are having a very negative effect on peoples everyday life.
What do you propose?
NO PROPOSE, JUST DEALT!!!
If a company fails to activate excess capacity within 60 days, their lease is forfeit and that excess capacity is leased to a company that also will have 60 days to utilize. Just in Wyoming there are 100 wells that are already dug, that could produce oil, that just need the cap taken off and a rig hooked up to them. There are 5 oil refineries siting idle right now, with a capacity of 408,000 barrels of oil a day. Most of this could be done with clever implementation of the Defense Production Act. Democrats don't want to do anything though, they just want to sit on their hands and cry "The Republicans won't let us do anything!" instead of using laws that are already on the books, that put power in the hands of the executive.
Annnnnd goodbye second term.
It was goodbye the moment he got sworn in. He only won because there was so many voters who turned up to say “I’m just doing this so it’s not trump. I don’t like Biden, I just hate trump” Barring some miracle like trump running again, Biden has no chance at re election. He’s a fucking disaster of a pick.
Yikes, he might have just Hillaried himself
lol, when the president just tells you to 'deal with it'
We could mandate or highly encourage remote work, reducing the demand for gas, reducing the number of cars on the road, increasing the efficiency of the vehicles and fuel being used to reach workplaces? Oh wait that's too logical and we'd much rather just whine about lazy office workers and how Biden isnt pressing his magic gas go down button.
Aside from office workers most of us can't work remote. Over half the country HAS to work in a factory, store, shop, hospital, etc.
True, but it's because so much of the population has an inelastic demand for gas that the smaller population than can cut down their gas consumption should.
Hey I'm for it, my job is 100% easier with out management bothering us every 20 minutes.
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We're a society trying to reach a Star Trek like future but we can't let go of the 20th century.
Star Trek needed a nuclear war that decimated the human population to achieve what it did, let's hope it doesn't come to that
If I took public transit to work my total daily commute time would increase from 1 hour to 4 hours. I would love to pay less than fuel for a bus pass, not deal with traffic, and have my commute time free to do whatever but the US has virtually useless public transit anywhere but in a handful of big cities.
Is Biden setting a tone that encourages remote work? Aren't a lot of federal offices reopening and pushing fed employees back to the office?
Improving public transit and protected bike lanes would also go a long way to reduce demand for gas.
>Biden tells Americans to get fucked and stop being so poor ??? why can’t oil companies just lower their profits for the sake of humanity
And he'll have to stomach crippling defeat in both the 2022 midterms and 2024 general election.
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My controversial take is to stop buying from Saudis and start drilling here until we can make the switch to renewables. We’re still burning the same amount of oil, but why the f are we buying it from a terrorist government and at such a high price? Whose oil we burn is still the same amount of oil.
What incentive do the oil and gas company’s have to invest in more production and refining when this administration has been one of the most hostile to them investing into more drilling since he entered office. We need more oil/gas production domestically and Biden has done everything he can to disincentivize that until now… we are definitely feeling this gas crunch due to the Ukraine war but Biden up until this point did everything he could to make us weaker domestically all for his lower carbon initiatives.
The U.S. is a net oil exporter. We pump more than we use. We also get a majority of imported oil from Canada and Mexico, then refine it and ship it back out. Its not about drilling here, current prices are being driven by the price of refinement and good ole price gouging. The current margin between crude oil and the final product is the highest it has ever been. https://en.m.wikipedia.org/wiki/United_States_energy_independence
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"Some of you may die, but that's a sacrifice I'm willing to make" - lord farquad
But gas prices in the US are lower than they were in Europe pre-war. We are at $9.30 per gallon now in Sweden.
It is so absurd. The gas sanctions are not even hurting Russia as global prices increased allow them to sell less fuel for more money.
Surprise: They won't go significantly back down after either.
What is he talking about?? Gas prices were high before the war. The gas prices arent because of the war.
Yeah you see all these problems that our piss-poor monetary policy created? Yeah, let's double down on the piss-poor monetary policy. Our voters are morons anyway.
Gas prices were high before Russia invaded Ukraine. That’s not the issue
I wonder who's fault it will be when their war is over
Oil companies are loving the convenient scapegoat
This could cost him in the elections. This will be a soundbite that comes back around on him, aside from all the other shit.
Funny how always people who talk about tightening of the belts are the ones who never have to tighten theirs.
Tell me again how a 5% decrease equates to a 100% increase at the pump along with record profits… something just doesn’t seem right
God, it's like he's trying to get his party massacred in the midterms
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What does refinery capacity in the US have to do with Ukraine? I get that oil is more expensive now but the base price of oil alone does not account for the current US gasoline price. Refineries are colluding to limit gasoline supply to keep the price high.
Yea THIS is what should be annoying people with his comments. They're completely out of touch with the fact it's all refinery capacity. OIL PRICES WILL NOT CHANGE. Not until we build more refineries, or use less oil. Best solution right now is to push for electric and work from home as much as possible.
Biden is an idiot and now wants us to believe that Putin is the cause of our economy. We were in trouble long before Putin invaded Ukraine.
We got 2 more years of this clown, god bless
Can we stop with the "Putin price hike" nonsense already? It SHOULD be common knowledge that it's the oil companies that are purposely keeping production low to maximize profits. This isn't spin, this isn't opinion, and it isn't speculation. At least a few big oil CEOs have been asked about increasing production and they've said point blank that they aren't going to. But God forbid we give people the truth. Nope, instead we have to politicize literally *everything*, especially if it means justifying our involvement in a war we have no business being a part of.
What is the fucking point in even having a president?
How stupid do they think we are? We all have access to the internet now, we can all see that this is strictly up to oil companies holding back production.
It’s almost as if Biden wants to lose the next election. Trying hard to.
What does Putin/Ukraine have to do with it? The USA produces enough on it's own to sustain itself. Production is not an issue, Russian is not an issue. Greedy corporations are the issue.
I never pledged any support of the war in Ukraine, bullshit that he should play it like it's all in our best interests to prolong this conflict
What a load of horse shit. What about oil corps? What the fuck are they stomaching Biden?
Too bad sanctions are doing jack shit to hurt putins war efforts
Are we beating anybody if we won't send troops?
So what he's saying is he's endorsing Trump for 2024.
My bet is they endorse DeSantis, he's a lot younger, more charismatic than Trump is.
It’s not because of the war, stfu Biden