This is deeply weird. If price goes up and you can produce at some price, you… produce more? Maybe you sell futures to hedge?
Not necessarily. For a ‘trivial’ example: even if the price of 200-year whiskey was a billion dollars for the next year, I shouldn’t necessarily invest everything into new production right now. Why? Because what matters for starting new production is the price in two hundred years, not now.
Oil and gas take a while to get online, and has relatively high fixed/startup costs, and the issue is a) the price when they come online, and b) any regulations made between now and then.
Not necessarily. For a ‘trivial’ example: even if the price of 200-year whiskey was a billion dollars for the next year, I shouldn’t necessarily invest everything into new production right now. Why? Because what matters for starting new production is the price in two hundred years, not now.
Oil and gas take a while to get online, and has relatively high fixed/startup costs, and the issue is a) the price when they come online, and b) any regulations made between now and then.