Is Biden Right About Oil Companies?

[Rajoo]

Whell, as usual when you accuse President of economic mismanagement, it usually something else (I suspect its the barrage of Trump & Fox lawsuits). As you continue to blame Biden for not expanding drilling which may or may not pay out in 10 or more years, is also dependent on how aggressively the oil companies want to pursue new drilling opportunities, here is one of the reasons why our gasoline prices continue to remain high. Very simply if a manufacturer can maintain a high level of demand by choking supply and garner higher profits, why would they be dumb enough to increase supply and bring prices down? Especially after their reduced revenues during the pandemic?

U.S Oil Production Has Been Slow to Respond

Given all the geopolitical uncertainty, U.S. oil companies aren’t in a hurry to dramatically expand production. For instance, the U.S. produced 11.5 million barrels of crude oil a day in May 2022, according to the U.S. Energy Information Agency. While that’s 200,000 more than a year ago, it’s roughly half a million barrels a day less than in 2019.

Why? For one thing, major oil companies don’t want to invest heavily on new wells only to see supply increase, prices decline and their profits dwindle.

This was a major theme of the fracking boom that helped propel the U.S. to become the number one global oil-producing nation over the last decade and a half. Many companies went bankrupt as they overextended themselves building out infrastructure, only to see oil and gas prices plummet on greater and greater supply.

https://www.forbes.com/advisor/inves...tion%20Agency.