Perhaps the BEST B1G Forum anywhere, here at College Football Fan Site, CFB51!!!

another reason to avoid fast food

hardly ever an option for gravy

You go to the wrong spots.  Whataburger has gravy. 

well, there was a pandemic and very little driving with the lockdowns and no commutes to and from work

Not here. Not where you live.

Japan to release radioactive water to Pacific ocean.  Commence cliff diving.

https://www.npr.org/2023/08/24/1195419846/fukushima-radioactive-water-japan


Seriously, I haven't found any report of the amount of tritium in the water being released.

Agreed. However, prior to the start of the ScamDemic, the prices were nowhere near the $3.50/gal that they are today.

Take it from someone who is directly in the middle of a very boom/bust industry (NAND flash and DRAM)... The swings that suppliers see from being just a few percentage points oversupplied to a few percentage points undersupplied in a global market are dramatic. 

In this industry, it's driven by technological development driving investments in new fabs that cost billions of dollars each. When those fabs come online and start pumping out supply, you need supply and demand to still be in balance or things get ugly. 

The problem is that with the number of NAND and DRAM suppliers in the world (for NAND it's actually only 5, which is probably too many), they tend to all feel the same pressures at the same time, and respond to it in the same way.

• When the market gets oversupplied, they can't take supply out very quickly due to long lead times, so prices crater and they lose a LOT of money (BTW we're in that part of the cycle now, and it fucking sucks). When that happens, they cut back on investments to bare minimum to conserve cash. They do this at the same time their competitors are also losing money, also cutting back on investment, and also trying to conserve cash. 
• The natural result of this is that they underinvest for the return of demand, and when that comes, prices jump due to undersupply, profits jump, and all that investment starts flowing--which gets us to an oversupply about 2-3 years later. 
• The cycle repeats. 

The 2020 pandemic was a very unique (lack of) demand signal that oil producers didn't know what to do with. They didn't know how long it was going to last. They couldn't predict prices 2-3 years down the road because of the unknown. So they pulled back investment. They cut back new exploration/development projects. They shut down uneconomic wells. 


So they actively cut back supply--to well BELOW 2019 levels--because of uncertainty that they would ever see ROI. 

But once pandemic fears eased, we had a couple of problems. First, you had a global populace that had mostly put off travel and other things that cause gasoline demand for a year or more, and they now REALLY wanted to travel. Second, you had a populace who were in many cases more flush cash-wise because they had been cooped up for a year or more and so they had discretionary income to spend. Third, you had governments across the entire world that had injected fiscal stimulus into the economies which causes, you guessed it, price inflation!

So we're in an inflationary economic market with demand that has returned to previous levels but supply that hasn't caught up. 

I can't imagine why prices are higher than 2019! It's probably all Biden's fault, I guess...

Take it from someone who is directly in the middle of a very boom/bust industry (NAND flash and DRAM)... The swings that suppliers see from being just a few percentage points oversupplied to a few percentage points undersupplied in a global market are dramatic.

In this industry, it's driven by technological development driving investments in new fabs that cost billions of dollars each. When those fabs come online and start pumping out supply, you need supply and demand to still be in balance or things get ugly.

The problem is that with the number of NAND and DRAM suppliers in the world (for NAND it's actually only 5, which is probably too many), they tend to all feel the same pressures at the same time, and respond to it in the same way.

• When the market gets oversupplied, they can't take supply out very quickly due to long lead times, so prices crater and they lose a LOT of money (BTW we're in that part of the cycle now, and it fucking sucks). When that happens, they cut back on investments to bare minimum to conserve cash. They do this at the same time their competitors are also losing money, also cutting back on investment, and also trying to conserve cash.
• The natural result of this is that they underinvest for the return of demand, and when that comes, prices jump due to undersupply, profits jump, and all that investment starts flowing--which gets us to an oversupply about 2-3 years later.
• The cycle repeats.

The 2020 pandemic was a very unique (lack of) demand signal that oil producers didn't know what to do with. They didn't know how long it was going to last. They couldn't predict prices 2-3 years down the road because of the unknown. So they pulled back investment. They cut back new exploration/development projects. They shut down uneconomic wells.


So they actively cut back supply--to well BELOW 2019 levels--because of uncertainty that they would ever see ROI.

But once pandemic fears eased, we had a couple of problems. First, you had a global populace that had mostly put off travel and other things that cause gasoline demand for a year or more, and they now REALLY wanted to travel. Second, you had a populace who were in many cases more flush cash-wise because they had been cooped up for a year or more and so they had discretionary income to spend. Third, you had governments across the entire world that had injected fiscal stimulus into the economies which causes, you guessed it, price inflation!

So we're in an inflationary economic market with demand that has returned to previous levels but supply that hasn't caught up.

I can't imagine why prices are higher than 2019! It's probably all Biden's fault, I guess...

This is why I got out of semiconductors and moved into the computer manufacturing industry.  The further out on the supply chain you get, the worse the "bullwhip effect" becomes.  Being closer to the final product and end-user customer, minimizes that volatility.