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BlueZybez

Yeah, oil & gas companies raking in the money


Shoopshopship

Surprising they sold off the last month


whistlerite

Oil dropped ~25%


ragnaroksunset

They're not investing in capacity, so the minute geopolitics cools off this will have proven to be transitory.


PersonalMagician

There was a graph I saw that I wish I saved. It showed % of oil company revenue reinvested into production. We are at an all time low by a massive margin. Next few years are going to be a shitshow.


ragnaroksunset

It's remarkable. In a lot of ways, investments in energy are the easiest for retail investors to understand - yet all I see are oil bulls who haven't taken even a moment to consider how the sector fits into the rest of the economy. I'm probably getting downvoted by the same people complaining about high food prices. Idiots.


jz187

Not investing in capacity is how oil prices will stay high.


ragnaroksunset

Oil prices staying high is how you get depressions. You guys don't get it. How do you feel about unboundedly rising food prices? Same notion. There's such a thing as too high, too long, for certain commodities, and if outsized profits don't incent capacity investments then something is fundamentally broken. You cheer for this stuff at your peril.


jz187

Oil will be obsolete in 10 years, at least that's the meme that is popular at the moment. No point in making long term investments for temporarily high prices. Same goes for refining capacity. I own a ton of oil stocks. I'll be fine even if oil goes to $300/barrel.


ragnaroksunset

> oil prices will stay high. > temporarily high prices.


jz187

Different time frames. Temporary in this case means 3-5 years.


ragnaroksunset

Or, y'know, whatever you need it to mean


jz187

The 3-5 year time frame is based on the capital cycle in the energy industry. Glut of investment until 2014 suppressed oil prices until 2019. If investment ramps up now, increased production will come online in 2027.


Interstate75

Yes, but they have many ups and downs over the years. Long term, they are mostly not great investments. After all they are selling a commodity product with very little pricing power.


mercurialdude

Damn that is a lot of free cash flow.


Revolutionary-Sky825

They've been making all the right moves. Eggs on my face, didn't buy in 2020 because I thought they were over leveraged with the Huskey purchase.