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munro

Petrol Prices

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This is from todays Times:

"THE economic damage from Hurricane Katrina will soon be felt in Britain with petrol prices possibly soaring as high as £1 per litre.

Flood-damaged American oil companies are expected to turn to European refineries for alternative supplies of road fuel, forcing up the price of petrol and diesel in Britain.

Concern that a tenth of America’s refining capacity lies under water sent the wholesale price of petrol rocketing on the NYMEX futures exchange in New York and yesterday shock waves raced across the Atlantic and buffeted Rotterdam.

Anticipating a surge of demand from US buyers, traders in Europe’s petrochemical capital pushed up the price of bargeloads of unleaded petrol by $50 (£28) per tonne to a record $801 (£445) per tonne. If these levels persist, petrol retailers in the UK will have little choice but substantially to raise the price of fuel at the pump, industry experts say.

“The Rotterdam market sets the price for European oil companies,” Stephen Brooks, an analyst at Wood Mackenzie, a leading oil consultancy, said. “If Americans are prepared to pay $800 per tonne for gasoline, they are not going to sell it to British retailers for less.”

Wood Mackenzie calculates that a retailer buying petrol at yesterday’s Rotterdam price would be forced to charge more than 99p per litre to meet his costs and pay taxes."

I'd say until this works through the system all bets are off - anyone thinking of buying now should sit on their hands for a month or two. If petrol (sorry, and diesel!) top £1/litre I can't see how a recession can't follow.

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Look at the rate of closure of local petrol stations, Ok there is stiff competition form the supermarkets (are prices being cross-subsidiised by their food sales?), regardless there sems to be little slack at the retail end and input prices will be reflected in the retail prices.

Watch for the scramble to install 4-digit pricing boards - if they do this rather than sticking a scribbled one in front of the signage you know that the expectation is that prices are going to stay there long enough to pay for the new signage, or longer!

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Flood-damaged American oil companies are expected to turn to European refineries for alternative supplies of road fuel, forcing up the price of petrol and diesel in Britain.

But with a desperate lack of oil tankers, will the actually be able to ship it to America?

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  • 302 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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