Oil Production is at Record High in US to Fight OPEC

So that is a no, you can't answer a basic question as to why demand for oil was low in January 2021? I think we both know that you know the answer to the question but that you don't want to say it.

 

Next OP. “The economy is doing great because Trump is barely down in the polls.”

 

The nihilists don't care...

 

Still awaiting the poster to explain how the WH is responsible for Global inflation. The US has done significantly better than the other developed countries, yet Cons can't or won't explain.

 

OPEC can cut back 10% and wipe out all our efforts. Only way to fight OPECs control is to reduce dependency on oil.

 

Someone needs to tell them that the Keystone pipeline had nothing to do with oil production, the stated subject of this thread.

 

Okay, I'll give you a third chance to answer a basic question: why do you suppose that oil demand was low enough in January 2021 that prices would be lower despite lower domestic supply?

 

Statistics are a very funny thing and can be used for all kinds of evil. I can twist stats in many ways as politicians do. Inflation rates are based on a 'bag of goods'. Depending on that bag they may be great or bad. Do research before you trust statistics you see on TV.

 

I'll take this one. Oil Glut. There was so much sitting offshore in tankers and investors were putting their money elsewhere. Eco and the invisible hand.

 

Okay, take this one step further: why would there be such an oversupply/glut when domestic production was relatively low? Basically, there could be two causes: international spike in production or domestic decrease in demand.

 

It should be noted that the weights that make up this bag of goods is created by consumption habits of the average consumer with a set group of methods to determine the weights. This is the proper way to measure inflation across an economy.

 

Fairly easy question. Demand dropped and supply didn't. Natural curve. If you are not making money on a product you reduce supply. Once demand ramps up you increase supply. Just how it works. I enjoy the discussion. Love ECO. My wife thinks I am a nerd lol.

 

Exactly. The demand dropped because of a pandemic. So the price went down. ET is trying to claim that is a good thing for the economy, which seems absurd as the pandemic wasn't really good for the economy, even if it led to lower prices. Also, not something that should be replicated as a strategy going forward.

 

Very true. Unfortunately politics get involved. I work with quite a few people that are just getting by and inflation is not 3% to them. They see meat and eggs at 50% inflation. There is no simple answer because there is no simple answer. When I hang out with some of my friends and family and they are all 'bitching' about everything I try to explain that. If there was one simple answer, there would be no more questions. Always keep your mind open and listen to the other side. That is how we learn!!!!!!!

My ECO teacher in high school taught me that many moons ago. What an awesome man and we disagreed on everything

 

I agree that much of the perception has to do with politics. For example, food inflation has been low enough over the last few years that average hours worked to pay for groceries is actually pretty low by recent historical standards (and is actually lower than 2019, although it did briefly spike above that during a brief period to 2017-2018 levels).



I saw a pretty funny exchange involving perceptions a few days ago:



This is pretty much the issue in a nutshell. There was absolutely inflation involving food, but nobody really keeps close track of their baseline. So the big claims are often more vibes driven on politics than actual economic analysis.

 

Okay, so your claim is that oil was cheaper despite lower supply (which is documented) and no difference in demand because...magic? The suspension of the law of supply-and-demand?