Fuel Protests

Re: Fuel Protests

A dire and stark warning sent to me this morning that was written by an analyst on fuels & oil in particular…

2005 Forecast No 1

OIL PRICE CATASTROPHE

It’s no secret the oil price is soaring – for the first time since trading began in New York in 1983, oil futures have passed the $50 per barrel mark. Oil has risen a massive 370{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} in dollar terms in the last six years.

Expensive oil has already been blamed for the sharpest annual increase in the cost of goods leaving the UK in eight years. Figures from the Office of National Statistics showed a 3.1{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} rise in the year to September 2004. And it’s already stoking up prices in the shops, creating a substantial headache for Gordon Brown in the lead-up to next May’s election.

But the thing that makes this situation different from previous oil crises is there is no logical reason for the oil price to stop rising in 2005 – or in fact ever!

The short-term outlook: Right now, the oil market remains stretched tight. A worsening security situation in Nigeria; supply disruptions due to devastating storms in the Gulf of Mexico; questions over Russia’s ability to maintain output; and, of course, continued instability and terrorism in the Middle East are all working together to keep the oil price at record levels. It’s a case of another day, another threat to oil supplies.

The medium-term outlook: The real dilemma is these disruptions are taking place in a global oil system that is already running at full capacity. Even without them, demand is growing – especially in China, India and the US. But there’s simply not enough spare capacity to deal with it. Oil inventories in the US are at 29-year lows. Crude imports to China, the world’s second-largest oil consumer, are growing at 20{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} a year – but their current oil stockpile will last just 21 days.

These factors alone are enough to keep oil expensive indefinitely. But when you look at the broader picture the situation is even more serious…

The long-term outlook: All of this is happening with “Peak Oil” looming in the background. Most experts agree that global peak extraction of oil will take place sometime this decade. And geophysicist Kenneth Deffeyes has told New Scientist that he is “99{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} confident” that the date of maximum global production will be in 2004 (yes, this year!). Put simply:

Oil at $50 per barrel is alarming enough. But unless there’s a sudden outbreak of world peace… a massive cessation of global growth… and an unprecedented rate of new oil discovery… $50 per barrel will seem like a steal in a year’s time.

And from the AA October’s report reads….

Prices rose this month. Higher Octane rose by 2.3p per litre (10.4p per gallon), Unleaded by 2.1p per litre (9.5p per gallon), Diesel by 2.6p per litre (11.8p per gallon). At Supermarkets Higher Octane rose by 2.6p per litre (11.8p per gallon), Unleaded by 2.2p per litre (10p per gallon), and Diesel by 2.5p per litre (11.3p per gallon).

The national average price for LPG is 38.80p per litre.

Interestingly (in some ways) we now sport the highest diesel prices in Europe at the pump.

Just thought you might like to know this stuff.

K.

Don’t start me, he just got it back… again! 🙄

K.