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Interestingly, oil investors experience this boom-and-bust cycle too: every time oil prices spike, a bunch of extra companies flood into the market to drill som
by WJW 5mo ago
Interestingly, oil investors experience this boom-and-bust cycle too: every time oil prices spike, a bunch of extra companies flood into the market to drill some wells or weld pipelines or build tankers or whatever. All the extra supply crashes the price and most of the new companies go bankrupt or get consolidated into the big energy firms. This slowly brings spare capacity back down, so the next time there's a disruption the cycle kicks off for its next round.
- smallerize 5mo agoThat used to be true, but things have really settled down. Notice the lack of rushing to start more fracking or refining projects during this crisis.
- margalabargala 5mo agoI don't know that I would hear about it. How would I know?
- balderdash 5mo agoThis is probably the most relevant metric: https://rigcount.bakerhughes.com/ https://rigcount.bakerhughes.com/ Not seeing a bunch more rigs operating means there new drilling isn’t ramping up.
- bigthymer 5mo agoTypical commodity cycle...most commodities work like this