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Houses Will Go Down, Oil Up

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http://seattletimes.nwsource.com:80/html/nationworld/2012609510_alaskaoil13.html

Short of it is, they running short & if the Collaspe had not come i wonder where we be now?

High Oil will KILL any recovery & inflation will rocket.....people will simply not have the cash to spend on Homes & fuel.

Mike

We only have two tankers left of the stock piled oil used in 08/09 to support prices and avoid the worst of the deflationary pressures. Looks like we are heading for another period of planned deleverging otherwise oil will take off again as in 08 and this time it will cause a panic.

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We only have two tankers left of the stock piled oil used in 08/09 to support prices and avoid the worst of the deflationary pressures. Looks like we are heading for another period of planned deleverging otherwise oil will take off again as in 08 and this time it will cause a panic.

All fundamental indicators are that the price of crude should come off, with the exception of the Iranian issues, most of which are already priced in.

It is the hot money, CASH, held by the hedge funds who are chasing short term commodity cash settled futures contracts for profits.

There is so much money "out there" looking for a home it has nowhere to go. The "owners" of the money are looking for yield. There is no upside in buying illiquid hard assets such as real estate as everyone knows it has peaked.

There is not a scrap of evidence to prove we have either reached or not reached peak oil. The higher the price of crude the more economically viable it becomes to extract from more remote sources etc.

The terrifying aspect is China and India's year on year increase in consumption. The West now has no alternative but to seek alternative energy to crude for basic electricity production. We must go nuclear as UK PLC already cannot afford crude at $76 bbl which is where we are today.

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All fundamental indicators are that the price of crude should come off, with the exception of the Iranian issues, most of which are already priced in.

I agree but it should never have got this high in the first place. Oil like the stock markets are now a monetary tool used by the FED/central banks now that we have reached zero interest rates. It is used as a tool to influence inflation (and protect the larger system, remember Russia neared meltdown in early 09 and needed oil above $50/barrel) , it's current price tells us nothing about peak oil or the strength of the economy.

Edited by Confounded

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Oil will double - Property will halve.

That is just for starters; but please, let's not call it austerity because it isn't.

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Like everyone else i look for "Peek oil" everyday, we have Mexico's main fields (Can-ter-al?) running down fast, North sea falling off & Saudi saying they going to stop further exporation work because (theres bugger all left) they want to leave some oil for furture generations. I wonder where we be if America didn't have 20% on the dole & 43 million Americans were not on food stamps!

Mike

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Like everyone else i look for "Peek oil" everyday, we have Mexico's main fields (Can-ter-al?) running down fast, North sea falling off & Saudi saying they going to stop further exporation work because (theres bugger all left) they want to leave some oil for furture generations. I wonder where we be if America didn't have 20% on the dole & 43 million Americans were not on food stamps!

Mike

Both OPEC and the IEA reported a large increase in oil supply in July nearing 87 million bpd, close to where we were in early 2008, so it seems we are still on the plateau. It is also surprising considering that everyone is claiming that the global economy is weakening this summer.

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My 1.4L Ford Focus cost £55 to fill up yesterday. Couldn't believe it, and neither could my wallet!!

All my friends are commenting on it.

My 1.8 diesel focus costs about the same to fill up. It does 51 mpg in normal day to day usage though. When (rather than if) oil starts to spike up to over $100 again then I'd expect the demand for gas guzzlers will plummet, like they did for a while in 2008 when conventional crude oil spiked at $150. I wouldn't have shares in 4x4 manufacturers. Or airlines.

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.....

There is not a scrap of evidence to prove we have either reached or not reached peak oil. The higher the price of crude the more economically viable it becomes to extract from more remote sources etc.

...

There's tons of evidence, such as this from the Oil Drum:

oilwatch_may2010_1.png

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My 1.8 diesel focus costs about the same to fill up. It does 51 mpg in normal day to day usage though. When (rather than if) oil starts to spike up to over $100 again then I'd expect the demand for gas guzzlers will plummet, like they did for a while in 2008 when conventional crude oil spiked at $150. I wouldn't have shares in 4x4 manufacturers. Or airlines.

Never really good to have shares in airlines. Didn't Buffet say that the total profits for the industry since its inception were zero?

You use the word "spike" which is accurate as at that level the global economy (as it is currently configured) starts to lock up and then oil prices plummet again. I suspect we will see this yo-yo act many times.

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Never really good to have shares in airlines. Didn't Buffet say that the total profits for the industry since its inception were zero?

I'm not sure what their net profits have been, but the fact that there's little tax on aviation fuel makes them extremely sensitive to oil prices. Unlike UK petrol and diesel which are highly taxed, such that crude going up 50% will 'only' up the price of petrol by 20% or so.

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There's tons of evidence, such as this from the Oil Drum:

oilwatch_may2010_1.png

Where is the peak?

I don't see an obvious trend in that graph. Could go either way.

Also oil production doesn't depend on how much oil is in the ground, not yet anyway. The amount produced depends on how much the oil countries want to produce (plus demand, price manipulation, etc)

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Where is the peak?

I don't see an obvious trend in that graph. Could go either way.

Also oil production doesn't depend on how much oil is in the ground, not yet anyway. The amount produced depends on how much the oil countries want to produce (plus demand, price manipulation, etc)

We're already past the peak production of light sweet crude. Expense up, quality down, prices up - that's the effect of peak oil that we'll see, even if the total crude extraction rate continues upwards or a while or even a long time.

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My 1.8 diesel focus costs about the same to fill up. It does 51 mpg in normal day to day usage though. When (rather than if) oil starts to spike up to over $100 again then I'd expect the demand for gas guzzlers will plummet, like they did for a while in 2008 when conventional crude oil spiked at $150. I wouldn't have shares in 4x4 manufacturers. Or airlines.

Small anecdotal:

Just traded in my 57 plate fiat (55mpg) for a smaller peugeot (70+mpg). Was prepared to buy new, but bought an ex-demo. However, 2nd hand models appeared to be like gold dust via dealers. Noticed he had tons of flashmobiles on the lot (esp Minis). When I enquired as to why (Mini dealership located within 500 yards), he said that they were trade-ins and he 'couldn't shift them'. Said a lot of his current trade was people buying Kia models (due to 7 year warranty) and people trading in for diesels or cars under 1200cc.

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Where is the peak?

I don't see an obvious trend in that graph. Could go either way.

Also oil production doesn't depend on how much oil is in the ground, not yet anyway. The amount produced depends on how much the oil countries want to produce (plus demand, price manipulation, etc)

Thank you for confirming that the graph does not confirm any "peak".

There is buckets of crude "out there". It is simply the cost and ease of extraction.

"Peak Oil Theorists" are of course entitled to their views and clearly there must reach a point of consumption vs afordable cost of product generation from refiners.

What is interesting is that the West have been closing down refineries for 30 years (last US refinery built in 1973) vs the East where China was creating a new online refinery one per week!!!!! until lately. So "Peak" believers are accurate to a degree in the sense of affordability for the likes of us as the price continually rises.

The earlier posts referred to costs of filling their cars. How much of their fillups were tax? 65% plus?

The irony is that we do need an alternative energy supply source but how will that be taxed? Solar - how does any Govt. tax us?

An earlier post highlighted production levels decreasing hugely in Brent/North Sea fields (not Norweigan/North Sea), Dubai, Mexico etc. But there are HUGE new discoveries in Brazil and Russia is exporting nearly 10 million barrels per day. Iraq has HUGE reserves as does Kazakstan and one or two other Former Soviet Union countries, plus Canadian shale etc. All that is happening is new oil is being exported from new territories.

As i said earlier, we need nuclear NOW in UK PLC. We need to seriously start examining ways of reducing our dependency on oil.

I live in a Grade II house. I cannot have double glazing, a wind turbine, solar panels blah blah blah. Our leaders are nuts. They talk the talk but don't walk the walk. I can easily erect a wind turbine tomorrow if they gave me planning permission, listed building consent and change of use for a small parcel of agricultural land. It would be well hidden from view and cost me £20,000 inc VAT. It would produce enough power for all my needs (I'm on 3 phase already and spend £350 per month) and it would create enough power to EXPORT back to the grid. The Govt will even pay me <£1000 per year to do it. But no, they are more content for me to drive around in an S5 doing 21 mpg rather than doing my bit.

So for all the greens, luvvies, lefties etc your campaign HAS worked. Now turn your attention to the public sector clip board merchants who call themselves Officers at the Local Authority and get them to change their Planning Policies.

Until then I'm using oil, heating, petrol, diesel you name it.

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Small anecdotal:

Just traded in my 57 plate fiat (55mpg) for a smaller peugeot (70+mpg). Was prepared to buy new, but bought an ex-demo. However, 2nd hand models appeared to be like gold dust via dealers. Noticed he had tons of flashmobiles on the lot (esp Minis). When I enquired as to why (Mini dealership located within 500 yards), he said that they were trade-ins and he 'couldn't shift them'. Said a lot of his current trade was people buying Kia models (due to 7 year warranty) and people trading in for diesels or cars under 1200cc.

Another small anecdotal;

Trying to sell my 55mpg diesel BMW and replace it with a 23mpg petrol BMW that i should have bought first time round. Both were priced within £500 of each other, same age, spec etc. Doing 14k miles a year, the massively higher depretiation of the diesel car i bought means that i would be about £3k better off if i'd bought the guzzly petrol version. I've spent 3 times more on depreciation than i have on fuel in the last 2 years.

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Another small anecdotal;

Trying to sell my 55mpg diesel BMW and replace it with a 23mpg petrol BMW that i should have bought first time round. Both were priced within £500 of each other, same age, spec etc. Doing 14k miles a year, the massively higher depretiation of the diesel car i bought means that i would be about £3k better off if i'd bought the guzzly petrol version. I've spent 3 times more on depreciation than i have on fuel in the last 2 years.

Yowser :o I'm unlikely to ever need to know about the world of Beemer depreciation.

Bought my last car brand new for cash - £5500 (Fiat Panda 1.2) and traded it this year after 45,000 hard miles. Got £3k for it and the dealer is attempting to resell for £4,500 (which I wouldn't give him as it has a slightly dodgy paint job and typical Fiat electrics).

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Yowser :o I'm unlikely to ever need to know about the world of Beemer depreciation.

Bought my last car brand new for cash - £5500 (Fiat Panda 1.2) and traded it this year after 45,000 hard miles. Got £3k for it and the dealer is attempting to resell for £4,500 (which I wouldn't give him as it has a slightly dodgy paint job and typical Fiat electrics).

Congrats. That's very impressively cost effective motoring if I may say so. It would appear to be approx. £70 a month depreciation on a new car over 3 or so years which is quite astonishing really.

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Congrats. That's very impressively cost effective motoring if I may say so. It would appear to be approx. £70 a month depreciation on a new car over 3 or so years which is quite astonishing really.

Bloody good going isn't it. New price pre-scrappage manipulation and post scrappage resale when the s/h supply is still tight.

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Bloody good going isn't it. New price pre-scrappage manipulation and post scrappage resale when the s/h supply is still tight.

Thanks guys. The power of having cash and not needing finance was drummed into me by my dear late Dad. He NEVER bought a damn thing on finance and was the king of sucking his teeth on car lots and saying 'Well, I've got the cash, son, if ye want to deal the day, like.....'

Also, small cars rule. I do a lot of miles, so MPG is king for me. I also sold an 80,000 mile Peugeot 205 for more than I paid for it. Depreciation minimal, despite me hammering the highways and by-ways. Fun to drive, too.

Edit: Just checked the dealer's website and he has reduced me old Panda to £4k.

Edited by Mancghirl

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Thanks guys. The power of having cash and not needing finance was drummed into me by my dear late Dad. He NEVER bought a damn thing on finance and was the king of sucking his teeth on car lots and saying 'Well, I've got the cash, son, if ye want to deal the day, like.....'

Also, small cars rule. I do a lot of miles, so MPG is king for me. I also sold an 80,000 mile Peugeot 205 for more than I paid for it. Depreciation minimal, despite me hammering the highways and by-ways. Fun to drive, too.

Edit: Just checked the dealer's website and he has reduced me old Panda to £4k.

Crikey, you should be in the trade. Did do you buy from auction or was it some sort of special deal? Auctions can be fun, can keep safe(er) with low age warrantied examples.

Edit - re Panda, don't know what is happening in the market - seemed loopy for a while with second hand way overpriced, but then new prices have been high, maybe another sign of a shoe or two dropping - too high you won;t get the business.

Edited by OnlyMe

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  • 142 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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