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U.S. President Trump wants more drilling, but the oil market is already saturated with hundreds of idle oil leases sitting untapped in the Gulf of Mexico (grist.org)

submitted 13 hours ago by Anyone@slrpnk.net to c/climate@slrpnk.net

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Of the 2,206 active leases in the Gulf of Mexico, only a fifth are producing oil, according to records from the Bureau of Ocean Energy Management, which regulates offshore drilling. Oil industry executives and analysts say the current number of 448 oil-producing leases is unlikely to grow significantly, even if Trump makes good on promises to expand leasing opportunities and expedite drilling permits.

The market is saturated with oil, making companies reluctant to spend more money drilling because the added product will likely push prices down, cutting into profits.

“It’s not the regulations that are getting in the way, it’s the economics,” said Hugh Daigle, a professor of petroleum engineering at the University of Texas in Austin. “It’s true that there are a bunch of undeveloped leases in the Gulf, and it’ll stay that way if we continue to see low or stagnant oil prices.”

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[–] Kernal64@sh.itjust.works 14 points 11 hours ago (3 children)

From the article, it doesn't sound like the market is saturated with oil at all. If the oil companies are afraid that more drilling will drive prices down, it sure seems like they're colluding to restrict the amount of oil in the market so they have some cover for their price fixing. That said, the focus should really be on switching to renewables, but that won't be happening anytime soon.

[–] ProdigalFrog@slrpnk.net 3 points 2 hours ago

it sure seems like they’re colluding to restrict the amount of oil in the market so they have some cover for their price fixing.

They absolutely are.

[–] WalrusDragonOnABike@reddthat.com 1 points 2 hours ago

If the market is saturated with oil, oil prices go negative. Its happened before.

[–] SARGE@startrek.website 15 points 9 hours ago (2 children)

it sure seems like they’re colluding to restrict the amount of oil in the market

Um....

Yes? 100% always has been, they literally have meetings and what is essentially a corporate union specifically to do it. And they're not subtle about it.

Is this really news to some people?

[–] Kernal64@sh.itjust.works 4 points 7 hours ago

It's not news to me, but it sure seems to be news to the article author, given the way it's presented.

[–] Jondar@lemmy.world 3 points 8 hours ago

They want to keep oil prices around $80 a barrel (in general). It's the "sweet spot" for profitability and gas prices essentially...