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Oils up to over $63 today, if this is sustained for a reasonable period of time is this guaranteed to feed through in inflationary pressures in the not too distant?

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Oil at these levels is majorly inflationary.

From the dawn of time this has been the case.

Some how with New Labour in charge the figures are unaffected.

The business community think different that's for sure.

Transportation costs have an impact in a big way.

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Oils up to over $63 today, if this is sustained for a reasonable period of time is this guaranteed to feed through in inflationary pressures in the not too distant?

Without a doubt.

Think in simple, common-sense terms

Food needs to be delivered. So there will be some increase here.

Food needs to be kept fresh, using plastics - plastics are made from oil.

Plastics will become more expensive.

Electricity and gas, generated or delivered using oil.

And of course plain old vanilla "petrol" gets more expensive for the consumer.

Inflation up. Spending down. House prices staggering = ......I dont wanna think about it.

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Without a doubt.

Think in simple, common-sense terms

Food needs to be delivered. So there will be some increase here.

Food needs to be kept fresh, using plastics - plastics are made from oil.

Plastics will become more expensive.

Electricity and gas, generated or delivered using oil.

And of course plain old vanilla "petrol" gets more expensive for the consumer.

Inflation up. Spending down. House prices staggering = ......I dont wanna think about it.

Apparently it can take up to two years for the full effects to filter through.

I suspect though that it's a little puffed up at the moment and, according to the CEO of BP, oil will probably trade in the $40 to $45 region 'when the dust settles'.

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Your question hits the nail on the head. It's not so much a problem of the price being even, say, $70 for a short period. It's about the sustained high price of oil (even somewhat below $60) that will eventually pose problems.

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Reduce petrol tax or bomb Iran i say else you will see blood on the streets of the UK if it goes on much longer as people can not keep borrowing and so few live within there means.

Party is over, move along

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Apparently it can take up to two years for the full effects to filter through.

I suspect though that it's a little puffed up at the moment and, according to the CEO of BP, oil will probably trade in the $40 to $45 region 'when the dust settles'.

Can anyone explain in a nutshell what factors are exactly driving up the price of oil at the moment? Is this purely a supply issue? What does the CEO of BP base his 'when the dust settles' comments on? What is he anticipating? If it is purely a supply problem can't there be global pressure put on OPEC to increase output for a while? I'd be interested if anyone could wrap up the whole rising oil price factors in a paragraph or two

Edited by Swipe

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It looks like a bubble to me (that doesn't mean i'm calling this the top though).

With all the this time its different stuff.

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It looks like a bubble to me (that doesn't mean i'm calling this the top though).

With all the this time its different stuff.

Actually this time it could very well be different. At some point we will hit Peak Oil and some people are saying we may have already hit it. Even if we haven't hit it yet, there are other factors at play such as the industrialisation of China, India and other eastern nations, along with overestimates of oil reserves such as occured in Saudi Arabia.

So I personally believe that at some point oil will rise and never come down. The question of course is whether we are at that point or whether i is still some tome off and this is a false dawn.

Oil prices probably will fall a little but I can't see them falling to the low levels of a few years ago.

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@swipe and bushboy

Many people are convinced that this has all got to do with a theory called "peak oil".

That is, the world is presently pumping the maximum amount of oil that it possibly can.

This has two sides.

Firstly no more oil is available than is currently available, therefore the increase in demand for oil (from china, india etc..) cannot be met with increased production and therefore prices will rise with demand.

Secondly, and this should be noted, at the peak we are at the mid point of the graph.

Therefore there is still the same amount of oil that has ever been pumped available to be extracted. That is, there is plenty of oil left, we're not going to "run out" of oil - the pessimists often overlook this.

This problem can be addressed quickly and effectively by people being careful about how they use resources - recycle, drive less, dont leave the TV on all night.

If you are afraid of change, and afraid of acknowledging your own part in this problem, then you have a lot to fear. If you are prepared to make changes in how you live your life - if you play your part - I believe any disruption can be mitigated.

That said, "peak oil" is just a theory and there are plenty of people who disagree with it. Hope that helps.

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Secondly, and this should be noted, at the peak we are at the mid point of the graph.

Therefore there is still the same amount of oil that has ever been pumped available to be extracted. That is, there is plenty of oil left, we're not going to "run out" of oil - the pessimists often overlook this.

You should check out a lecture by a retired professor called Albert Bartlett. Compound growth in the use of a resource is an exponential function.

eg 2% year on year as we've seen with oil means usage doubles every 70/2 = 35 years.

So between 1865 and 1900 we used n barrels of oil

Between 1900 and 1935 we used 2n barrels ofoil

Between 1935 and 1970 we used 4n barrels of oil

and between 1970 and 2005 we will have used 8n barrels of oil

In each case the amount of oil used in the last 35 years was more than all the oil used since extraction began, since (for 1970-2005) 8n > 1n+2n+4n

So at just 2% growth in oil use over the next 35 years (in order to maintain economic growth in a world built on ever increasing amounts of cheap oil), we will use 16n barrels of oil, which is more than all the oil ever extracted in human history.

In other words, all the remaining oil that's left in the ground will allow 2% growth for just another 35 years. And we've extracted the easy half first.

Edited by bottletop

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I wish we'd run out of oil tomorrow & send the problem to the history books. Thoughout our past the greatest advances have been made in times of crises.... if we run out of oil...

Sod that. I am all for a bit of change in life but if we ran out now, it would be hell on earth. Mad Max and all that.

What would be better is if we knew the true reserves. This would scare people into action and addressing the problem, and with a bit of luck conserving some oil for tasks that it is absolutly required for. If we ran out now, what would power the machines to extract the nuclear fuel or make the solar/wind/hydrogen thingys??

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Not sure how Peak Oil can be a theory disagreed with by some? Surely it's a fact that oil WILL run short at some point? Again the question is whether that time has been reached yet.

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Guest Bart of Darkness
Reduce petrol tax or bomb Iran i say else you will see blood on the streets of the UK if it goes on much longer

Threaten people's civil liberties and they do nothing.

Raise fuel prices and you've got blockades, marches, boycotts.

What a screwed up country we live in.

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RE OIL

I would like to pose this question that seems to elude most people - WHOOOOOOSH!

The Government love to blame US for getting in our cars/lorries etc and then wasting billions of £££'s per annum by sitting in Traffic Jams.

A terrible waste of an individuals time/life

A loss of productive time to all companies/councils.

Worst possible cause of pollution and inefficiency in a combusting engine.

ETC

When exactly will GOVERNMENT PLANNERS be held accountable for their gross mistakes over the last decades?

They should be stripped of their pensions and held accountable in public view!

PS Why can't the dimwits start spending money creating new motorways by drilling tunnels under the countryside and 2nd tier roads as in many other countries.

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I dont think that running out of oil will be such a disaster for the human race.

I firmly believe other methods of powering transport will "suddenly" be discovered just before the world grinds to a halt.

These technologies probably already exist in some form but as yet the need to throw money at the R&D is not there.

In fact the oil / energy companies are probably actively suppressing any such discoveries, until they have sold all of thier oil, and they will sell every last drop, i'm sure of that, regardless of the effect on the environment !

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Therefore there is still the same amount of oil that has ever been pumped available to be extracted. That is, there is plenty of oil left, we're not going to "run out" of oil - the pessimists often overlook this.

The pessimists don't overlook the fact that peak oil doesn't mean we're going to run out. Pessimists recognise that the amount of oil left is irrelevant, the only thing that matters is the RATE at which we can extract it. Peak oil means the extraction rate starts to fall, removing the growth engine that fuelled civilization as we know it for over 100 years.

That said, "peak oil" is just a theory and there are plenty of people who disagree with it. Hope that helps.

Peak oil is not "just a theory" it's been proved over and over again in different countries with 33 of the top 48 countries (America, Norway, Venezuela, UK, Indonesia etc) having already past their peak with extraction rates declining. Globally conventional oil peaked in 2004 with the growth since then being made up from non-conventional (heavy, deep water, tar sands, shale) sources. Non-OPEC production has peaked as can be seen here.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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