u/mikybob12 is right: it's about (no pun intended) sunk costs (ie capital expenditure) and operating expenditure
The CapEx to get a drill up and running is huge
But the OpEx to keep it running is minimal
Think about the cost to build a house vs living in it – your monthly cost to run a house is, say, $2000 (taxes, maintenance, utilities, etc)
But it cost $250,000 in the first place
Same thing with oil rigs – the millions of $$$ spent to build it have been spent: whether it's used or not
So you might as well use it
April 20, 2020 at 09:10AM
via reddit https://www.reddit.com/r/Economics/comments/g4s0y2/us_oil_prices_on_pace_for_their_worst_day_ever_as/fnz7ske?utm_source=ifttt