Originally Posted by
REAL Pilot
A lot of talk of supply and demand. I see the correlation to inflation and profit margin but WHAT ABOUT PRODUCTION COSTS? Cost is typically what drives pricing. So is it accepted that the oil rigs cost twice as much to pump money out of the ground as several years ago?
Production costs for old wells have remained fairly flat, bringing in new discoveries is far more expensive usually because they are deeper, under water, or under ice in isolated areas.
The demand is driving prices up and production has not kept pace.
If we were to switch to an all electric economy next week, it is quite safe to assume the price of electricity would climb rather steeply.