A Fifteen Point Journey on Oil Prices (and what might be next):
1.Government policies/regulations disincentivized investors from building new refineries.
2. Limited refinery capacity limited American supply of refined products.
3. Governments inflated the money supply which increased demand.
4. Governments sanctioned Russian oil which reduced supply/increased demand.
5. More money chasing fewer goods bids up prices.
6. High prices make politicians nervous. In an effort to lower prices, they began releasing supply from the Strategic Petroleum Reserve (SPR).
7. The Government plans to replenish the SPR by sending out bids in the Fall of 2022. Estimated replenishment window is after 2023 when “oil prices & demand are expected to be significantly lower”.
Right.....
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8. The end of the SPR supply (this fall) might boost oil prices.
9. European demand might increase this fall.
10. Fall harvest might increase demand.
11. Fall prices may be high, during mid-term reelections.
12. Knowing this the Government might take actions in an attempt to lower gas prices:
13. Both do the opposite and INCREASE prices.
14. Which in turn might cause the Government to get nervous and deplete supplies from the SPR in an effort to lower prices.
15. And a reserved oil supply might come in handy if war was on the horizon.
-THANKFULLY we're not saber-rattling with a major nuclear power AND government's "one size fits all" solutions ALWAYS work.
Manager, Renewable Fuels and Company Culture
2 年Great work, Jared! Excellent examination on what's happening and what to expect. If only the free market were permitted to operate unabated by government intervention/political gamesmanship.
Fuel
2 年Even though gas prices have come down some in the past few weeks. It's the big truck fuel that needs to be watched after, These companies are taking on a tremendous amount of overrun on there fuel cost. We would like to push all of it off on to the customer, however one must stay relevant in the market or soon they will be closing there doors like so many have . Kind of like trickle down economics. The fuel charge has to go some where. I fear for the elderly that are on a fixed income trying to heat there home this year. Let's pray are elected officials can figure this one out. It's a doozy
Driven procurement professional | $2.5M in savings generated | IASSC-CBB?
2 年Very insightful but straight-to-the-point explanation. Nice work, Jared!
President at Duncan Oil Company
2 年Excellent Work Jared! Proud of U!!! Keep it rolling...
Strategy | Customer Success Management | Professional Services Management
2 年On point as always Jared!!! Keep up the great work at Duncan Oil!!!