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> Something happened in the oil industry which is unexplained by economics

1. Tons of producers went bust during the shale boom and covid price fallout.

2. Remaining producers see that the future will require less oil and remember the rest of the industry failing when they increased production.

3. They dont increase production.

This is exactly what economics projects. Less competition = worse prices. It doesnt take collusion for everyone to come to the same cocnlussion.



if the producers went bust, wouldn't their equipment/assets be bought for cheap? Particularly if the price of oil and profitability of those assets is rising?




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