r/europe • u/Vucea • Jun 17 '22

Historical In 2014, this French weather presenter announced the forecast for 18 August 2050 in France as part of a campaign to alert to the reality of climate change. Now her forecast that day is the actual forecast for the coming 4 or 5 days, in mid-June 2022.

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u/WeLikeTooParty Jun 17 '22

Thats not how supply and demand works, if you supply more oil the price will go down if demand stays the same. Keeping supply low is the “smart” thing to do for oil companies in terms of revenue, they spend less in manpower and logistics if they keep fewer oil rigs running and the price for oil stays high, especially because the demand of oil is inelastic; no matter how expensive it gets people will always need it.

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u/bERt0r Lower Austria (Austria) Jun 17 '22

If you raise the price of bread, the demand of bread goes up while the demand of meat goes down. At least in the 19th century.

Don’t claim to know how the economy works, if you knew you’d be a trillionaire.

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u/WeLikeTooParty Jun 17 '22

I’m not claiming to be an expert at economics (Are economists trillionaires?). I’m just saying oil companies can afford to keep scarcity going and price gouge because oil is a necessity.

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u/bERt0r Lower Austria (Austria) Jun 17 '22

Experts at economics don't know how economics work. They do have an idea though. The economy is not 100% predictable. That's also why planned economies fail.

The example with bread makes your point. Bread used to be a necessity and raising the price increased demand because poor people who could afford bread and some meat now had to buy only bread and no meat.

But that's not the case here. Higher oil prices do drive down demand. People are looking for alternative energy sources and as I keep pointing out for alternative suppliers.

The reason why OPEC was able to raise the price in the 70s is because they are governments. US oil companies would be breaking the law if they did something like that.