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TBH - this sounds like a very weak counter-point. The pertinent information is that oil production declined in the US during the 2021 inflationary period. A poi
by lumost 2y ago
TBH - this sounds like a very weak counter-point. The pertinent information is that oil production declined in the US during the 2021 inflationary period. A point in time where under classic money theory - either investments should have been happening too quickly or too many dollars were chasing too few goods.
Something happened in the oil industry which is unexplained by economics (at least to my knowledge), and trivially explained by collusion/price-fixing.
- HDThoreaun 2y ago> Something happened in the oil industry which is unexplained by economics 1. Tons of producers went bust during the shale boom and covid price fallout. 2. Remaining producers see that the future will require less oil and remember the rest of the industry failing when they increased production. 3. They dont increase production. This is exactly what economics projects. Less competition = worse prices. It doesnt take collusion for everyone to come to the same cocnlussion.
- lumost 2y agoif the producers went bust, wouldn't their equipment/assets be bought for cheap? Particularly if the price of oil and profitability of those assets is rising?