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Restricting the supply allows them to keep the margins high, increasing supply would mean that price would drop How does your stance make sense at all? In what

by feet 4y ago

Restricting the supply allows them to keep the margins high, increasing supply would mean that price would drop How does your stance make sense at all? In what market does increasing supply not lead to decreasing prices? Of course they're going to keep restricting supply to keep prices high while they can. What I don't understand is why you're here defending them without listening to the earning calls where they literally state what I am telling you

kortilla 4y ago
> How does your stance make sense at all? In what market does increasing supply not lead to decreasing prices? It’s super basic economics unless you control 100% of the market. An oil provider that doubles their output from 1% of the market to 2% will only put a slight downward pressure on the price while doubling their high margin income. The winning move is always to increase production. > without listening to the earning calls where they literally state what I am telling you I’m telling you that you don’t understand what they are saying. If they are unwilling to build it’s because the future of the oil is uncertain, not because the margins are high right now. The margins being high is a great reason to expand drilling even into hard to extract areas.
- feet 4y ago
  You're misunderstanding what I'm saying. They don't need to build anything They already have capacity, they have the distilleries and holding already built but sitting entirely unused, they just aren't spinning it up to purposely restrict supply and keep profit margins high. That's what we get with an oligarchy, the companies work together to control production and price.
  - kortilla 4y ago
    You’re misunderstanding that there is no reason to hold the oligopoly. If the profit margins are high and look to be high for the future, the winning move is 100% to break and boost production. It’s free mountains of cash. The math is is a simple as, “why make a billion on a 500 mill investment when you can make 2 billion on 1.1 mill”? You’re suggesting they are both incompetent and not greedy, which can’t possibly be true of all of them.

by feet 4y ago

kortilla 4y ago

> How does your stance make sense at all? In what market does increasing supply not lead to decreasing prices? It’s super basic economics unless you control 100% of the market. An oil provider that doubles their output from 1% of the market to 2% will only put a slight downward pressure on the price while doubling their high margin income. The winning move is always to increase production. > without listening to the earning calls where they literally state what I am telling you I’m telling you that you don’t understand what they are saying. If they are unwilling to build it’s because the future of the oil is uncertain, not because the margins are high right now. The margins being high is a great reason to expand drilling even into hard to extract areas.

feet 4y ago
You're misunderstanding what I'm saying. They don't need to build anything They already have capacity, they have the distilleries and holding already built but sitting entirely unused, they just aren't spinning it up to purposely restrict supply and keep profit margins high. That's what we get with an oligarchy, the companies work together to control production and price.
- kortilla 4y ago
  You’re misunderstanding that there is no reason to hold the oligopoly. If the profit margins are high and look to be high for the future, the winning move is 100% to break and boost production. It’s free mountains of cash. The math is is a simple as, “why make a billion on a 500 mill investment when you can make 2 billion on 1.1 mill”? You’re suggesting they are both incompetent and not greedy, which can’t possibly be true of all of them.