Socialists say the darndest things.
Oil companies set oil prices. Nobody else does, Sen. Sheldon Whitehouse (D-R.I.) said.
Markets. How do they work anyway?
“The left thinks oil companies set oil prices,” says Dan Dicker, founder of The Energy Word and author of “Turning Oil Green.” “That’s just false. Oil companies don’t set prices. If they did, they wouldn’t have let oil prices go negative in 2020.”
Supply, demand. Those are just words.
Let Tim Robbins explain it.
It doesn’t matter how much oil is available and how much people want. Companies just magically set prices based on darts they throw at a giant greedy dartboard.
In 2020, for instance, the sudden COVID pandemic caused such an oversupply of oil that the price briefly turned negative, meaning producers couldn’t sell their product and had to pay for storage. That didn’t last long, but low prices for most of 2020 wrought havoc in the industry, forcing cutbacks that persist to this day.
That oil oversupply was great for motorists. Gas prices fell to a low of $1.87 in 2020. But Exxon posted a gargantuan $22.4 billion loss, the largest in its history. That’s why Whitehouse and Khanna compare 2021 profits to pre-pandemic levels of 2019, two years earlier: using the normal year-over-year comparison would force them to acknowledge even greedy oil companies lose money when the market turns against them.
You don’t have to applaud oil companies, I don’t, but Biden and the Democrats keep claiming that inflation is a worldwide problem and then they blame companies for raising prices while insisting that they know what they’re doing.
Speaking to reporters Wednesday afternoon, Federal Reserve Chairman Jerome Powell noted that the Fed can’t do much to affect energy and food prices, however, noting that they are largely set by global commodity prices.
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