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  • Lerxst1992Lerxst1992 Posts: 4,856
    edited August 5


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
  • Jearlpam0925Jearlpam0925 Deep South PhillyPosts: 15,103
    When I lived in London I could get anywhere in what seemed like 15 minutes.  In Houston it takes me 45 to get to Target 5 miles away.

    why Americans don’t support public transport infrastructure is beyond me.  They sit in traffic and complain constantly though but don’t seem to want to do a thing about it 

    really politicians or whoever should  just drop the environmental argument.  Make it a convenience argument. 
    I think it's hard as a whole to compare Houston, or the country, to something like Europe.  But, I get what you're saying, absolutely. I'd take it a step further and say not only it's a matter convenience but speaking to the costs and implementing cost prohibitive measures. Convenience is what will win people over, but the only way to do that is start with incentivizing that convenience.
  • tempo_n_groovetempo_n_groove Posts: 32,645


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
  • mrussel1mrussel1 Posts: 25,759


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
    I don't understand what you're saying.  You're questioning how the war in Ukraine could lead to higher oil prices?
  • tempo_n_groovetempo_n_groove Posts: 32,645
    mrussel1 said:


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
    I don't understand what you're saying.  You're questioning how the war in Ukraine could lead to higher oil prices?
    No inflation.  I can see that w the war in Ukraine as Russia wasn't supplying more oil but then I can go back to oil companies not helping to fill that void thus driving up demand and prices.
  • Cropduster-80Cropduster-80 Posts: 1,608
    edited August 5
    mrussel1 said:


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
    I don't understand what you're saying.  You're questioning how the war in Ukraine could lead to higher oil prices?
    No inflation.  I can see that w the war in Ukraine as Russia wasn't supplying more oil but then I can go back to oil companies not helping to fill that void thus driving up demand and prices.

    I’ll tell you my wife spent 9 years on a massive oil field expansion project.  It took that long to get 30-40 percent more production. She started on it two oil price crashes ago.  It’s really not like you can snap your fingers and produce considerable excess amounts of oil.  

    It was in progress when oil was 115 a barrel (not this time, but the time before) and when oil was 20 a barrel and when it went negative.  That was super weird when that happened although it was more of a short term technicality 

    the economics are based on long term average prices/projections, not the price right now.  Prices will crash again.  It happens all the time.  Worst thing you can do is produce based on todays prices 
    Post edited by Cropduster-80 on
  • mrussel1mrussel1 Posts: 25,759
    mrussel1 said:


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
    I don't understand what you're saying.  You're questioning how the war in Ukraine could lead to higher oil prices?
    No inflation.  I can see that w the war in Ukraine as Russia wasn't supplying more oil but then I can go back to oil companies not helping to fill that void thus driving up demand and prices.
    I'm  not sure why you think OPEC is interested in helping to fill that void.  They are trying to optimize their profit.  That means allowing prices to float higher for a period of time, but not long enough to create a recession and therefore drive down demand.  

    And when energy prices rise, everything goes up with it. 
  • tempo_n_groovetempo_n_groove Posts: 32,645
    mrussel1 said:


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
    I don't understand what you're saying.  You're questioning how the war in Ukraine could lead to higher oil prices?
    No inflation.  I can see that w the war in Ukraine as Russia wasn't supplying more oil but then I can go back to oil companies not helping to fill that void thus driving up demand and prices.

    I’ll tell you my wife spent 9 years on a massive oil field expansion project.  It took that long to get 30-40 percent more production. She started on it two oil price crashes ago.  It’s really not like you can snap your fingers and produce considerable excess amounts of oil.  

    It was in progress when oil was 115 a barrel (not this time, but the time before) and when oil was 20 a barrel and when it went negative.  That was super weird when that happened although it was more of a short term technicality 

    the economics are based on long term average prices/projections, not the price right now.  Prices will crash again.  It happens all the time.  Worst thing you can do is produce based on todays prices 
    I get that u can’t just get more oil out of a well. What u can do is reopen the wells that they have on the books already that they capped baa as ck when it wasn’t as profitable. 

    But again, why would u want to do that right? Money’s good right now. 

  • tempo_n_groovetempo_n_groove Posts: 32,645
    mrussel1 said:
    mrussel1 said:


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
    I don't understand what you're saying.  You're questioning how the war in Ukraine could lead to higher oil prices?
    No inflation.  I can see that w the war in Ukraine as Russia wasn't supplying more oil but then I can go back to oil companies not helping to fill that void thus driving up demand and prices.
    I'm  not sure why you think OPEC is interested in helping to fill that void.  They are trying to optimize their profit.  That means allowing prices to float higher for a period of time, but not long enough to create a recession and therefore drive down demand.  

    And when energy prices rise, everything goes up with it. 
    They aren’t. Just like the oil companies aren’t interested in uncapping the wells they plugged up during the cheap oil days. 

    My argument was the record profits that they are getting. 

    Look at Exxon/Mobil’s last 12 quarters. 
  • mrussel1mrussel1 Posts: 25,759
    mrussel1 said:
    mrussel1 said:


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
    I don't understand what you're saying.  You're questioning how the war in Ukraine could lead to higher oil prices?
    No inflation.  I can see that w the war in Ukraine as Russia wasn't supplying more oil but then I can go back to oil companies not helping to fill that void thus driving up demand and prices.
    I'm  not sure why you think OPEC is interested in helping to fill that void.  They are trying to optimize their profit.  That means allowing prices to float higher for a period of time, but not long enough to create a recession and therefore drive down demand.  

    And when energy prices rise, everything goes up with it. 
    They aren’t. Just like the oil companies aren’t interested in uncapping the wells they plugged up during the cheap oil days. 

    My argument was the record profits that they are getting. 

    Look at Exxon/Mobil’s last 12 quarters. 
    I would be surprised if Exxon had record profits in 2020, is that really the case?  

    The thing about oil companies is that their costs to extract crude is pretty stable, so when oil shoots up in price, their margins skyrocket.  But I don't even blame them for that.  Opec+ fundamentally controls the price of oil.  US companies just ride the coattails of that. 
  • Cropduster-80Cropduster-80 Posts: 1,608
    edited August 6
    mrussel1 said:
    mrussel1 said:


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
    I don't understand what you're saying.  You're questioning how the war in Ukraine could lead to higher oil prices?
    No inflation.  I can see that w the war in Ukraine as Russia wasn't supplying more oil but then I can go back to oil companies not helping to fill that void thus driving up demand and prices.
    I'm  not sure why you think OPEC is interested in helping to fill that void.  They are trying to optimize their profit.  That means allowing prices to float higher for a period of time, but not long enough to create a recession and therefore drive down demand.  

    And when energy prices rise, everything goes up with it. 
    They aren’t. Just like the oil companies aren’t interested in uncapping the wells they plugged up during the cheap oil days. 

    My argument was the record profits that they are getting. 

    Look at Exxon/Mobil’s last 12 quarters. 
    Talk to any reservoir engineer, it doesn’t happen like that and definitely not on the scale you are suggesting.

    you may cap an unprofitable well, but you aren’t restarting it later. You lose massive amounts of production that you will never, ever get back once you stop a well assuming you can even get it running again. Usually they don’t even cap them, they just sell them to a smaller company who works on lower margins who runs it into the ground.

    To replace the amount of Russian oil that isn’t in the market to even make a difference we aren’t talking pump jacks in the middle of a field you are talking 70 billion dollar multi decade mega projects 

    it’s a gas project not oil but look up the Gorgon project in Australia.  That’s the scale and timeframe  you need if you aren’t buying Russian oil.  That fact they spent that much money and time to extract that gas is also a good indicator of how difficult it is to get that kind of quantity 
    Post edited by Cropduster-80 on
  • Cropduster-80Cropduster-80 Posts: 1,608
    edited August 7
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
    I don't understand what you're saying.  You're questioning how the war in Ukraine could lead to higher oil prices?
    No inflation.  I can see that w the war in Ukraine as Russia wasn't supplying more oil but then I can go back to oil companies not helping to fill that void thus driving up demand and prices.
    I'm  not sure why you think OPEC is interested in helping to fill that void.  They are trying to optimize their profit.  That means allowing prices to float higher for a period of time, but not long enough to create a recession and therefore drive down demand.  

    And when energy prices rise, everything goes up with it. 
    They aren’t. Just like the oil companies aren’t interested in uncapping the wells they plugged up during the cheap oil days. 

    My argument was the record profits that they are getting. 

    Look at Exxon/Mobil’s last 12 quarters. 
    I would be surprised if Exxon had record profits in 2020, is that really the case?  

    The thing about oil companies is that their costs to extract crude is pretty stable, so when oil shoots up in price, their margins skyrocket.  But I don't even blame them for that.  Opec+ fundamentally controls the price of oil.  US companies just ride the coattails of that. 
    Profit margin in 2020 was 

    -44%
    -1.5
    -3.5
    -1


    Interesting that when it’s positive their best quarter ever appears to be only +16% which was last quarter. In Q1 they took a 4 billion dollar hit for exiting their Russian assets which wasn’t cheap.  Even with expensive oil there are still risks 


    Post edited by Cropduster-80 on
  • Lerxst1992Lerxst1992 Posts: 4,856
    mrussel1 said:
    mrussel1 said:


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
    I don't understand what you're saying.  You're questioning how the war in Ukraine could lead to higher oil prices?
    No inflation.  I can see that w the war in Ukraine as Russia wasn't supplying more oil but then I can go back to oil companies not helping to fill that void thus driving up demand and prices.
    I'm  not sure why you think OPEC is interested in helping to fill that void.  They are trying to optimize their profit.  That means allowing prices to float higher for a period of time, but not long enough to create a recession and therefore drive down demand.  

    And when energy prices rise, everything goes up with it. 
    They aren’t. Just like the oil companies aren’t interested in uncapping the wells they plugged up during the cheap oil days. 

    My argument was the record profits that they are getting. 

    Look at Exxon/Mobil’s last 12 quarters. 


    My comment was more along the lines that high oil prices drive inflation. When oil prices double and nat gas prices triple,we are spending more that increases inflation… but oil is also tied to many things like transportation and production, which drive up prices elsewhere.

    So if oil is double or triple that has a much larger impact than a 9% net profit margin. And comparing energy to other sectors, there are plenty of other sectors with higher net margins, in my link above.
  • Cropduster-80Cropduster-80 Posts: 1,608
    mrussel1 said:
    mrussel1 said:


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
    I don't understand what you're saying.  You're questioning how the war in Ukraine could lead to higher oil prices?
    No inflation.  I can see that w the war in Ukraine as Russia wasn't supplying more oil but then I can go back to oil companies not helping to fill that void thus driving up demand and prices.
    I'm  not sure why you think OPEC is interested in helping to fill that void.  They are trying to optimize their profit.  That means allowing prices to float higher for a period of time, but not long enough to create a recession and therefore drive down demand.  

    And when energy prices rise, everything goes up with it. 
    They aren’t. Just like the oil companies aren’t interested in uncapping the wells they plugged up during the cheap oil days. 

    My argument was the record profits that they are getting. 

    Look at Exxon/Mobil’s last 12 quarters. 


    My comment was more along the lines that high oil prices drive inflation. When oil prices double and nat gas prices triple,we are spending more that increases inflation… but oil is also tied to many things like transportation and production, which drive up prices elsewhere.

    So if oil is double or triple that has a much larger impact than a 9% net profit margin. And comparing energy to other sectors, there are plenty of other sectors with higher net margins, in my link above.
    Yeah.

    you can’t just exclude energy prices to get a more accurate gauge  of inflation for that reason either. 

    Goods, services, transportation etc are all higher because of oil prices.  Minus the cost of oil I have to think inflation is probably no where near it’s current levels.  

    People need to spend less to slow the economy.  When oil prices are involved it gets tricky 
  • mrussel1mrussel1 Posts: 25,759
    mrussel1 said:
    mrussel1 said:


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
    I don't understand what you're saying.  You're questioning how the war in Ukraine could lead to higher oil prices?
    No inflation.  I can see that w the war in Ukraine as Russia wasn't supplying more oil but then I can go back to oil companies not helping to fill that void thus driving up demand and prices.
    I'm  not sure why you think OPEC is interested in helping to fill that void.  They are trying to optimize their profit.  That means allowing prices to float higher for a period of time, but not long enough to create a recession and therefore drive down demand.  

    And when energy prices rise, everything goes up with it. 
    They aren’t. Just like the oil companies aren’t interested in uncapping the wells they plugged up during the cheap oil days. 

    My argument was the record profits that they are getting. 

    Look at Exxon/Mobil’s last 12 quarters. 


    My comment was more along the lines that high oil prices drive inflation. When oil prices double and nat gas prices triple,we are spending more that increases inflation… but oil is also tied to many things like transportation and production, which drive up prices elsewhere.

    So if oil is double or triple that has a much larger impact than a 9% net profit margin. And comparing energy to other sectors, there are plenty of other sectors with higher net margins, in my link above.
    Yeah.

    you can’t just exclude energy prices to get a more accurate gauge  of inflation for that reason either. 

    Goods, services, transportation etc are all higher because of oil prices.  Minus the cost of oil I have to think inflation is probably no where near it’s current levels.  

    People need to spend less to slow the economy.  When oil prices are involved it gets tricky 
    Well it's no coincidence that the inflation of the 70s was a result of the OPEC embargo. 
  • Cropduster-80Cropduster-80 Posts: 1,608
    edited August 7
    The other important part of all this is oil prices in a free market is a form of rationing based on your ability to pay.  With the current supply and if hypothetically the price per barrel were artificially cut in half, gas stations wouldn’t have any gas.  The lower the price goes, the more you use and with demand (based on that low price) far exceeding supply you have a whole different problem.  

    you can have rationing in one of two ways.  Fix the price (government intervention) and have miles long lines at gas stations or let supply and demand balance based on price and be able to get gas when you need it, provided you have enough money.

    the whole point here is higher prices leads to lower usage and thus availability of gas. 

    It’s no different than US healthcare Vs UK healthcare.  They both ration care.  The US balances supply and demand based on your ability to pay, the UK balances supply and demand based on immediate need.  That’s why it’s easier to get an elective procedure more quickly in the US.  You are paying a lot more for that
    Post edited by Cropduster-80 on
  • Jearlpam0925Jearlpam0925 Deep South PhillyPosts: 15,103
    Also a reason why energy and food prices are excluded from CPI. 
  • tempo_n_groovetempo_n_groove Posts: 32,645
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
    I don't understand what you're saying.  You're questioning how the war in Ukraine could lead to higher oil prices?
    No inflation.  I can see that w the war in Ukraine as Russia wasn't supplying more oil but then I can go back to oil companies not helping to fill that void thus driving up demand and prices.
    I'm  not sure why you think OPEC is interested in helping to fill that void.  They are trying to optimize their profit.  That means allowing prices to float higher for a period of time, but not long enough to create a recession and therefore drive down demand.  

    And when energy prices rise, everything goes up with it. 
    They aren’t. Just like the oil companies aren’t interested in uncapping the wells they plugged up during the cheap oil days. 

    My argument was the record profits that they are getting. 

    Look at Exxon/Mobil’s last 12 quarters. 
    I would be surprised if Exxon had record profits in 2020, is that really the case?  

    The thing about oil companies is that their costs to extract crude is pretty stable, so when oil shoots up in price, their margins skyrocket.  But I don't even blame them for that.  Opec+ fundamentally controls the price of oil.  US companies just ride the coattails of that. 
    Profit margin in 2020 was 

    -44%
    -1.5
    -3.5
    -1


    Interesting that when it’s positive their best quarter ever appears to be only +16% which was last quarter. In Q1 they took a 4 billion dollar hit for exiting their Russian assets which wasn’t cheap.  Even with expensive oil there are still risks 


    DateValue
    June 30, 202216.04%
    March 31, 20226.25%
    December 31, 202110.91%
    September 30, 20219.39%
    June 30, 20217.11%
    March 31, 20214.74%
    December 31, 2020-43.88%
    September 30, 2020-1.50%
    June 30, 2020-3.35%
    March 31, 2020-1.11%
    December 31, 20199.03%
    September 30, 20195.00%
    June 30, 20194.64%
    March 31, 20193.81%
    December 31, 20188.79%
    September 30, 20188.41%
    June 30, 20185.53%
    March 31, 20187.11%

    We all know that 2020 was shit because of covid.  They had a nice bounce back though. Only 16%?  Companies that big look to do 4% and make a nice return.  16% on that much revenue is huge!
  • tempo_n_groovetempo_n_groove Posts: 32,645
    mrussel1 said:
    mrussel1 said:


    I think the weird part about all this is it seems sometimes like people are convinced that were already in a recession. And even though we're not it's like they want to will it to happen.
    Isn't 2 consecutive quarters of down GDP a recession by definition?
    Yes, by the general definition. But that's like looking at the stock market as the economy, or anything else that values context. It also includes high levels of unemployment, sales dropping, income falling, manufacturing contracting. None of these things have happened. NBER considers all of these things when evaluating what is and isn't a recession, too.
    Gotcha.

    I did just read that our exports are really high the last 2 quarters.  Because of Russia Ukraine squabble, Europe is looking of our LP G and grains.
    Yeah, that can be weird though. High exports means a strong US dollar, and that is and isn't a good thing. Because another anomaly is a strong dollar usually means low inflation, but we all know that's not the case (globally).
    I believe that it's not inflation but greed.  The signs point to it.  Oil having record profits because prices are so damn high?  C'mon man...


    What signs? Oil prices were up 100% from pre pandemic levels and net profits are around 9% (and that’s making up for losses during the pandemic).That’s sounds like inflation. Also energy is mid level profit net margin compared to other sectors, with plenty of sectors higher, such as communication, tech, real estate, and financials, which are over double that of the energy sector . So let’s start yelling at all the bankers now.



    https://www.yardeni.com/pub/sp500margin.pdf
    I don't get how oil prices are caused by inflation?

    Demand went up and the oil companies/opec, have the ability to produce more oil but they don't because profits are good.

    I'm failing to see how that is related to inflation or Russia for that matter as you have the two leading producers of oil not producing more.
    I don't understand what you're saying.  You're questioning how the war in Ukraine could lead to higher oil prices?
    No inflation.  I can see that w the war in Ukraine as Russia wasn't supplying more oil but then I can go back to oil companies not helping to fill that void thus driving up demand and prices.
    I'm  not sure why you think OPEC is interested in helping to fill that void.  They are trying to optimize their profit.  That means allowing prices to float higher for a period of time, but not long enough to create a recession and therefore drive down demand.  

    And when energy prices rise, everything goes up with it. 
    They aren’t. Just like the oil companies aren’t interested in uncapping the wells they plugged up during the cheap oil days. 

    My argument was the record profits that they are getting. 

    Look at Exxon/Mobil’s last 12 quarters. 
    Talk to any reservoir engineer, it doesn’t happen like that and definitely not on the scale you are suggesting.

    you may cap an unprofitable well, but you aren’t restarting it later. You lose massive amounts of production that you will never, ever get back once you stop a well assuming you can even get it running again. Usually they don’t even cap them, they just sell them to a smaller company who works on lower margins who runs it into the ground.

    To replace the amount of Russian oil that isn’t in the market to even make a difference we aren’t talking pump jacks in the middle of a field you are talking 70 billion dollar multi decade mega projects 

    it’s a gas project not oil but look up the Gorgon project in Australia.  That’s the scale and timeframe  you need if you aren’t buying Russian oil.  That fact they spent that much money and time to extract that gas is also a good indicator of how difficult it is to get that kind of quantity 
    The capped wells weren't profitable during the glut of cheap oil, that's why they were abandoned.  With the high price of oil now it would be very profitable but like I said before, why would they want to do that?

    Any start up or exploration costs money.  With Biden not a fan of new exploration and companies not wanting to spend that money for it they will enjoy the profits now but a time will come when they have to go out and seek new areas to pump/drill.
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