Wednesday, Jul 25, 2007
Oil soon to under $70 reducing inflation
BBC: Oil prices fall on stocks hope
Oil prices have fallen for the fourth day, ahead of US data that is tipped to show a rise in petrol stocks.
Posted by david20040_0 @ 01:37 PM (196 views) Add Comment
21 Comments
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1. david20040_0 said...
If oil and gasoline drop surely this will reduce inflation?
2. waitingfor hpc said...
yep - but you have yet to see the rise from this! that comes first. and the predictions not so long ago where for $40 a barrel so $70 is still a VERY big increase.
3. sold 2 rent 1 said...
David,
Inflation in China has tripled in 1 year.
Chinese wages are rocketing.
When the yuan rises and sterling falls over the next 1-2 years our inflation will shoot up.
4. david20040_0 said...
The Yuan has to be keep low as if it increases too much against the US $ its exports will crash.
5. sold 2 rent 1 said...
The only way to cool the Chinese economy is to raise IRs and to allow the yuan to rise.
This will happen over the next year or two.
It's the short term pain after the boom that nobody wants but is necessary for the long term future.
6. Rickyb said...
Falling oil prices may reduce direct energy costs (filling your car etc), but it just means that there is more money available for purchasing all of the other items in the "basket of goods", so I'd be doubtful whether this has much impact on overall RPI inflation. The BofE should be more concerned about the UK's ballooning money supply.
7. david20040_0 said...
Not going to happen, China will keep booming.
8. planning4acrash said...
This will be a short term reprieve. Watch Iran and the hurricane season. Chinese demand going up 8% a year and production actually declined this year.
http://www.theoildrum.com/node/2716
Peak oil is upon us and any reprieve will be short lived, August is a time when downwards corrections are part of the seasonal norm. Expect oil will spike again this autumn or earlier.
9. david20040_0 said...
Iran is calming down and said they would increase oil production.
The hurricane season looks pretty mild this year. Katrina is a distant memory now.
10. harold said...
david20040_0, Oil's rise to ca $70 / barrel IS inflation, and illustrates how the world is increasingly awash with dollars looking for a home. As China et al release their VAST reserves of dollars onto the market expect to see oil at ca $100/barrel. This price will have little or nothing to do with peak oil or extra demand from China etc., but will/is symptomatic of dollar inflation. And dollar inflation means inflation for the rest of us. With regards to IRs, they all depend upon when the central banks decide to call in their loans and begin amassing even more assets from the world's middle classes. The rich get richer...
11. Seanb303 said...
oil is bought 3, 6 and 12 months in advance
the $70 dollar barrals won't be delivered until september the earlist then they'll need refining
last weeks high oil prices won't hit consumers until october , november time
just in time for christmas shopping, reducing highstreet spending
12. david20040_0 said...
Oil has been $70 USD for while now, i.e. last summer it was nearly $79.
However oil and gasoline stocks are up. The Middle East is calming down.
Gasoline prices in the US and Canada where they react quicker are dropping.
When they drop here this will lower inflation.
Also the driving season is nearly over and oil will then dip in the autumn / fall as well.
13. sold 2 rent 1 said...
David,
It is happening
China hikes interest rates again. Fifth time in 15 months central bank raises rates in effort to contain inflation.
http://money.cnn.com/2007/07/20/news/international/bc.china.economy.rates.reut/index.htm
Chinese Yuan Gains Against US Dollar To Record Ahead Of Growth Report
http://www.dailyfx.com/story/dailyfx_reports/top_fx_market_movers/Chinese_Yuan_Gains_Against_US_1184790253616.html
You live in a dream world.
14. Andy said...
Meanwhile -
The rest of the world is churning out about 80,000,000 barrels crude A DAY!!.
Refined petrol stock up 40,000 barrels - wow! Discoveries at all time low.
The oil price is a future price - increasing production now will only allow short term falls then face higher peaks in the long term.
ONCE ITS GONE, ITS GONE.
15. harold said...
david20040_0, with respect me thinks you do not really know what inflation is or its cause.
16. harold said...
...oh, and the as for the Middle East calming down - if C.20 history tells us anything, it is that periods of 'calm' in the Middle East are preludes to more blood-shed. And anyway if I had the misfortune to live in Gaza, "calm" would be a meaningless concept.
17. enuii said...
The long term trend is up alongside all the other inflationary pressures, this is another small blip on the upwards trendline and short of a global recession oil prices will continue to climb as oil in real terms is still cheap as its only the taxation that makes it expensive at the pumps etc in the UK.
18. Lufcbear said...
I think the BULL BROADCASTING CORP just got it wrong - check the price @ Bloomberg report now.
19. Spikey said...
http://www.bloomberg.com/apps/news?pid=20602099&sid=aEhusXK8SLDs&refer=energy
ohhhhh dearrrrr
20. lvmreader said...
Oil maybe dropping in price due to other fsctors, like desperate banks and hedge funds unwinding their long positions in oil to cover their CDO losses.
Read about Amaranth. Petrol prices dropped due to massive unwinding of those long positions by Amaranth to fund a losing bet on natural gas.
21. lvmreader said...
@David_20040,
You are clearly an Agent Provocateur.
Your claims on this forum are there to wind us up. You do not believe that Japan is an Island for starters.
You don't seem to have a clear grasp of economics.
Are you Kirstie Allsop?