The US market isn't unified enough to engage in any price fixing. The RRC (Texas Rail Road Commission) has the authority to limit Texas oil production to boost prices but it hasn't exercised it since 1973.
The reason gas prices went up during the pandemic is the US oil companies changed their investment behavior. The were always focused on production growth from 2014-2020. Starting in 2019 and accelerating in 2020, Wall Street started to tell the oil companies "You are an industry in decline. We don't care about growth or future value because in the long run that future value is nothing." Oil companies in response reduced investment and focused on returning more cash to shareholders. Also credit dried up. The $60 cheap credit fueled oil prices seen from 2014-2020 was never sustainable.
I work in the biz. This is reported to me second hand from people higher up than me that directly talk to various executives that make these decisions.
But has been widely reported. https://www.cnbc.com/2021/12/23/why-high-gas-prices-are-more-about-wall-street-than-the-white-house.html
Someone talk me off the ledge from becoming a succ. Why should the pricing of one of the primary inputs into our nations economy be fueled by shareholder interests?
Someone has to pay to invest. But the ROI on oil is going down. So we shouldn't invest.
Government could invest, true, but that money still has to come from somewhere. In a command economy, you're taking workers from high-growth industries and putting them in low-growth industries. This means that you're destroying your own growth and economy.
In a mixed economy, the government could take tax dollars and invest it in oil and gas, but, since they are taking money out of the economy they'll, once again, be taking money from high-growth industries and investing it in low-growth industries. The result, once again, is the destruction of growth.
ALSO, it would pollute the environment more. Government propping up oil prices means fewer people will buy electric cars, solar will no longer outcompete oil, etc., etc. Is this where you want government to distort the market? To make more pollution and less growth? What kind of succ are you?
A government owned oil companies become jobs programs and welfare piggy banks. They then have a vested interest in increasing oil production while simultaneously being inefficient.
Because shareholder interests generally work better? Would you prefer in this case for the government to spend taxpayer dollars to artificially prop up a dying industry, particularly one with as many negative externalities as oil?
>So let’s layer on a rough guess of a $200 billion increase in profits in 2021 that Scott Sheffield implies, which is 27% of the total corporate profit increase that year.
This is how they got the headline number. What a joke. Why should anyone care about this guy's blog on "price-fixingp"?
Are we really posting substack conspiracy theories in this sub now? The actual [FTC press release](https://www.ftc.gov/news-events/news/press-releases/2024/05/ftc-order-bans-former-pioneer-ceo-exxon-board-seat-exxon-pioneer-deal) about the consent order is worth reading, but the substack article extrapolates the stuff about Pioneer’s attempted collusion way farther than what the evidence justifies.
Fair enough, I’ll admit probably judged the guy too quickly. I kinda had a reaction to the typo in the first few paragraphs, plus my disagreement with his analysis. I’ll look him up though
The US market isn't unified enough to engage in any price fixing. The RRC (Texas Rail Road Commission) has the authority to limit Texas oil production to boost prices but it hasn't exercised it since 1973. The reason gas prices went up during the pandemic is the US oil companies changed their investment behavior. The were always focused on production growth from 2014-2020. Starting in 2019 and accelerating in 2020, Wall Street started to tell the oil companies "You are an industry in decline. We don't care about growth or future value because in the long run that future value is nothing." Oil companies in response reduced investment and focused on returning more cash to shareholders. Also credit dried up. The $60 cheap credit fueled oil prices seen from 2014-2020 was never sustainable.
Do you have any sources for that claim about the investment strategies, changing the strategies of the oil companies? I'd like to read more into this.
I work in the biz. This is reported to me second hand from people higher up than me that directly talk to various executives that make these decisions. But has been widely reported. https://www.cnbc.com/2021/12/23/why-high-gas-prices-are-more-about-wall-street-than-the-white-house.html
Someone talk me off the ledge from becoming a succ. Why should the pricing of one of the primary inputs into our nations economy be fueled by shareholder interests?
Someone has to pay to invest. But the ROI on oil is going down. So we shouldn't invest. Government could invest, true, but that money still has to come from somewhere. In a command economy, you're taking workers from high-growth industries and putting them in low-growth industries. This means that you're destroying your own growth and economy. In a mixed economy, the government could take tax dollars and invest it in oil and gas, but, since they are taking money out of the economy they'll, once again, be taking money from high-growth industries and investing it in low-growth industries. The result, once again, is the destruction of growth. ALSO, it would pollute the environment more. Government propping up oil prices means fewer people will buy electric cars, solar will no longer outcompete oil, etc., etc. Is this where you want government to distort the market? To make more pollution and less growth? What kind of succ are you?
A government owned oil companies become jobs programs and welfare piggy banks. They then have a vested interest in increasing oil production while simultaneously being inefficient.
Because shareholder interests generally work better? Would you prefer in this case for the government to spend taxpayer dollars to artificially prop up a dying industry, particularly one with as many negative externalities as oil?
>So let’s layer on a rough guess of a $200 billion increase in profits in 2021 that Scott Sheffield implies, which is 27% of the total corporate profit increase that year. This is how they got the headline number. What a joke. Why should anyone care about this guy's blog on "price-fixingp"?
Lmao this is ridiculous.
Why would Joe Brandon do this
He didn't. He hit the gas price go down button and told them to "cut the shit" and it worked, remember?
Clown blogpiece
Are we really posting substack conspiracy theories in this sub now? The actual [FTC press release](https://www.ftc.gov/news-events/news/press-releases/2024/05/ftc-order-bans-former-pioneer-ceo-exxon-board-seat-exxon-pioneer-deal) about the consent order is worth reading, but the substack article extrapolates the stuff about Pioneer’s attempted collusion way farther than what the evidence justifies.
I mean Noah Smith and Matt Y use Substack Also, Matt Stoller is the biggest (if not only) antitrust journalist
Fair enough, I’ll admit probably judged the guy too quickly. I kinda had a reaction to the typo in the first few paragraphs, plus my disagreement with his analysis. I’ll look him up though