Limiting the production of oil in any sense is going to increase the price. Biden has said no more drilling on public land and imposed new regulations on pollution.
Here we can see the price of oil futures going back a few years. We can see they start an upward trend once Biden gets into office. and long before the Ukraine conflict.
There are two parts of this, what Biden has done, and what people fear he might do.
There is a trade off between using goods now, and using them later. The higher the return for using them later, the higher the return for using them now has to be in order to justify consuming it.
If Biden says, no more drilling on public land, you are right, that would not impact supply immediately, but it would impact the expected supply and price of oil in the future. Which means that in order for the oil to be consumed now, the price has to be higher.
If you add to that the expected regulations to come in the future, further restricting or taxing fossil fuel use, it pushes this even higher.
So because it is expected that the price of oil will be more expensive in the future, both because of what Biden has done already, and because of what he has promised to do, then the price of oil has to increase now. Do you understand what I'm trying to convey?
FURTHER EXPLANATION
Let's say you have 10 barrels of oil to sell. You can sell those barrels now for $100 dollars, or you can sell them in a year for $200 dollars.
The more the price of oil in the future increases, so too does your incentive to wait to sell.
In response to this, the price of oil has to increase in the present, to compete with the prices promised in the future.
So if the future price rises to $250, the present price might increase to $130 in order to incentivize producers to sell now, rather than wait for higher returns in the future.
What Biden has done is send signals that in the future, the supply of oil will be lower, and the price higher, which incentivizes producers to wait for those higher returns, which as a result increases the prices now, in order to compete.
Completely wrong. When covid hit and the lock downs started, oil demand took a nose dive, and shortly afterward producers reduced output because of the lack of demand. The reduction in demand was more than the entire oil production of the united states: 15m barrels per day.
During the recovery, consumer demand increased at a faster rate than the production increase... leading to rising prices. It continues to be higher than world production. Right now, demand is back to pre-pandemic levels, but production is still a few million barrels (per day) short.
The US oil production COVID low was 9.7m bpd.. we're currently at 11.4m bpd. We're already the #1 producer in the world. If you added the current global shortfall, it would put us way past record levels. Your belief that the US alone can make up this shortfall is entirely based on speculation and the belief of unlimited US production.
Again, the COVID dip was larger than the entire US production. It's silly to believe a global problem can be solved entirely by the US.
And the issue with OPS analysis is that he wants to blame biden, when his own chart clearly shows prices rising since the COVID dip... something that happened before he was elected. This has nothing to do with politics.
Production is limited by the choice of the oil and gas companies. There are plenty of sites available for extraction, but they are not being exploited because producers have been burned multiple times investing into a short-term spike in prices. If prices remain elevated for a while, they will start to drill.
This is extremely reductionist. It's like saying untying a balloon doesn't cause it to deflate, the deflation is caused by the random motion and collisions of the air molecules.
Tough to say because Biden is also pushing policy to curb demand and EVs are rising rapidly. I'm not sure if markets have fully absorbed the world of falling supply and falling demand. Or if they actually believe demand will fall appreciably in the near future.
Yup hard to say. Thankfully citizens are seeing the reality of his anti-American policies and will make their displeasure felt at the polls this November.
Without endorsing all that is Trump, what I did like about his tenure is that I had more money in my pocket to make decisions for myself. Whether that be buying more energy efficient appliances or perhaps an EV. Now I have less money, appliances are more expensive, and we're being told "don't like the price at the pump, just buy an EV lol".
More money in the pockets of already affluent people doesn't spur much new consumption. Only policies that put energy efficiency in the hands of everyone are going to make a dent.
As a person Trump was a shitshow. Had he listened to feedback from his advisors and I dare say the general public he would still be in office. His policies which include foreign relations, immigration, energy and monetary though were pro American and good for the USA as a whole.
That's nonsense. The president doesn't even set monetary policy. Monetary policy is explicitly designed to be apolitical yet it didn't stop him from threatening the fed chair with retaliation if he didn't set negative rates. Thankfully Powell ignored him or inflation would be substantially worse.
He told Germany and other NATO leaders that dependence on Russian oil was a major threat to their economies. He told them they should focus on other avenues. But they didn't listen. He was tough on Russia.
He wasn't advising Germany to divest from Russia because it would strengthen NATO. He was saying NATO was corrupted because of Russian oil and therefore was worthless. This is based on the same fallacious perspective that Putin employs. Namely that NATO exists to be Russia's adversary. NATO exists for the defense of politically-aligned democracies against aggressors. Russia is only the enemy of NATO because they choose to be. Trump's behavior towards Ukraine was not only grotesquely unethical and breach of his Constitutional obligations but seriously weakened their position when it came to resisting Russia.
Based on all his public statements and all the insider accounts from both career civil servants and even his own political appointees, Trump never bothered to understand the subtlety of NATO or really any other policy. Just read what Fiona Hill and John Bolton among others have to say. He wanted out of NATO. He respected the word of Putin, he hated Ukraine and it was 100% personal. He refused to press Putin on election interference when he met him in Finland, but withheld Congressionally appropriated aid to Ukraine unless they did him a favor to help his own electoral fortunes.
The 2% defense spending target was negotiated by Obama and agreed by NATO members before Trump took office. Trump took that cue and railed that America was paying for NATO as though it were a dues-based organization. When he went to Brussels to push for compliance, he raised the prospect of 4% as a new spending target even when the US was tracking to drop below 3%. While he may have achieved a policy victory here and there it was only ever by coincidence. I've not seen any indication has understands or even cares about any policy whatsoever and only says things that get him attention.
https://www.marketwatch.com/investing/future/crude%20oil%20-...
Here we can see the price of oil futures going back a few years. We can see they start an upward trend once Biden gets into office. and long before the Ukraine conflict.
There are two parts of this, what Biden has done, and what people fear he might do.
There is a trade off between using goods now, and using them later. The higher the return for using them later, the higher the return for using them now has to be in order to justify consuming it.
If Biden says, no more drilling on public land, you are right, that would not impact supply immediately, but it would impact the expected supply and price of oil in the future. Which means that in order for the oil to be consumed now, the price has to be higher.
If you add to that the expected regulations to come in the future, further restricting or taxing fossil fuel use, it pushes this even higher.
So because it is expected that the price of oil will be more expensive in the future, both because of what Biden has done already, and because of what he has promised to do, then the price of oil has to increase now. Do you understand what I'm trying to convey?
FURTHER EXPLANATION
Let's say you have 10 barrels of oil to sell. You can sell those barrels now for $100 dollars, or you can sell them in a year for $200 dollars.
The more the price of oil in the future increases, so too does your incentive to wait to sell.
In response to this, the price of oil has to increase in the present, to compete with the prices promised in the future.
So if the future price rises to $250, the present price might increase to $130 in order to incentivize producers to sell now, rather than wait for higher returns in the future.
What Biden has done is send signals that in the future, the supply of oil will be lower, and the price higher, which incentivizes producers to wait for those higher returns, which as a result increases the prices now, in order to compete.