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No discussion here about the environment. This indirectly fuels demand.
by truckerbill 6y ago
No discussion here about the environment. This indirectly fuels demand.
- sgt101 6y agoHow so?
- truckerbill 6y agoAny news of gains like this raises optimism about oil prices, more people will be inclined to invest. More generally, engaging in the market is being complicit with it. Worth noting we’re all complicit, but trading is more voluntary.
- fauigerzigerk 6y agoNo, I don't believe that. If anything, oil prices becoming extremely volatile hurts the oil & gas sector. It makes investment in real production capacity less attractive, more risky and more difficult to finance. The gains you're talking about are tiny compared to the massive write-downs at oil companies.
- truckerbill 6y agoI agree with you there, overall the situation isn't completely bad news. The only thing better than volatile is a fully downward trend however. I guess I'm just arguing that we owe ourselves a bit of moral decisionmaking rather than just continuing to believe in the providence of the Invisible Hand. These guys weren't doing this for the sake of the environment.
- londons_explore 6y agoBecause someone owning an oil fired power plant can buy all these negative priced oil futures, take actual delivery, and burn the oil to produce electricity and get paid for that. Normally, burning oil to make electricity is uneconomic, since gas, coal, and even renewables are cheaper. Oil fired plants were sitting mostly mothballed for the last decade in most of the world, for use only in emergencies.
- fauigerzigerk 6y agoBut they don't have the storage capacity, otherwise prices would never have gone below zero.
- amelius 6y agoYou don't need storage if you immediately burn the oil?
- fauigerzigerk 6y agoHow much can they possibly burn immediately upon delivery and which other fuel would it replace? I don't know for sure, but my hunch is that it's insignificant in terms of extra carbon emissions.
- MaxBarraclough 6y agoTo mirror fauigerzigerk's point: The power demand is already being met by the existing system. How could you profit by burning the oil immediately for power generation?
- Traster 6y agoIt's true that low oil prices will encourage oil fired plants to open back up,but I'm not sure that a very short term drop is going to have much effect since spinning up and down a power plant isn't exactly a short term decision.
- londons_explore 6y agoMost of these plants are on 7 day standby - Ie. They need to be able to reopen within 7 days in case of war or disruption to gas supply.