YoursTruly
Platinum Member
- Dec 21, 2019
- 9,364
- 5,769
- Thread starter
- #221
On land that Obama controlled production went down...on land that he didn't it increased. Peddle that silly shit somewhere else, Surada! You're embarrassing yourself.
Domestic oil production doubled under Obama, period. Doesn't matter where.
Something that does matter is why 60% of the drilling permits that's already been issued to oil companies, don't have a drilling rig on them. They're permitted and ready to go. Just waiting on the oil companies.
The reason, in case you can't figure it out, is that it's a bust cycle. If the oil companies ramped up productions, pressurized their existing wells, drilled more well (on the land that's already permitted), the oil prices would go down and their overhead would go up. . Meaning a lot less profit.
So from a business stand point, let me ask you a serious question. If you were Exxon, would you:
A. Sit tight and keep making record profits from the high cost of oil and the extremely low overhead.
B. Hire all those drillers, pipeliners, Xray tech and geologist back. Pressurize existing wells. Drill more wells. And ramp up production so the price of oil could come back down to $40 barrel.
Let's do some math, shall we? The US consumes 19,000,000,000 barrels of oil per day. At the moment it's $110. And most of the oil field hands are on lay off.
19 billion X $110 = $2,090,000,000,000 in gross profit. (with much lower overhead)
19 billion X $40 = $760,000,000,000 in gross profit, (with a huge amount of overhead)
That's a daily loss of $1,330,000,000,000 in gross profit, plus the overhead.
Of course those numbers are spread out over all the oil companies. But you get the picture, right? Ramping up production will being the profits down. Way down.
You can sit on that extra monetary gain for as long as you can. Or start losing money right away? Which do you choose?