If all the oil threatening events were to have happened in 2018, the price of oil would be $140 BL.
In the case nobody ever noticed, you do not want to flood the market with oil when the price is in decline from the lack of sufficient demand to support the current production numbers.
So, who in the US is going to ‘drill baby drill’ and ‘shrink baby shrink’ their revenue even further ? Making more of it is good for profit margin ?
Is it even going to be good for ‘jobs baby jobs’ ? The number of new wells drilled per month will likely be cut in half in the 1st quarter alone and even more in the second if it continues.
Perhaps drill it, cap it, and wait for something to change before churning oil out of those wells. You can’t store it for long without eating into profits. 6 months is enough to stomp those out.
Is the government going to force Exxon-Mobile to ‘Drill Baby Drill’ ?
This should have been clear to anyone months ago.
What happens if you add a slowdown from import tariffs ?
Well, someone better figure out how to store all that ‘drill baby drill’ oil. And I might add the expense of storing it may be about $1-2 per BL per month. That going to make gas any cheaper ?
At least we will have many of the projects created by Biden Admin to keep the economy chugging along till Vance comes to power.
I would also point out that during the last oil production bubble, some co’s were paying money to some to take oil out of their storage. Yea, they were not just giving it away, but paying co’s to take it away. Great for the stock price don’t you think ? Look it up for yourself.
Great for the economy ? The refiners are not going to let the price slip below $2 gal even if they get it for free.
And it’s all happening without ‘drill baby drill’ that was a oxymoron to begin with.
By the time the new admin takes seat, gas will be about $2.40 gal national avg in the US.
And for it to go lower, you would have to slow economic activity to soften demand even more.
If this should go on for any length of time,
There will be pressure from US producers for the government to put some kind of cap on production in the US. ‘CAP BABY CAP’ ? Is what it could be.
That does not work well in a open world market. You just cause them to loose market share.
Just one more BS coined phrase nobody thought through very well !