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gruffydd

Oil Calamity This Winter

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Just watched interviews with Julian Lee (Senior Energy Analyst Specialist in oil market analysis - Centre for Global Energy Studies) and Mathew Simmons (Mathew Simmons is Chairman and CEO of Simmons and Company International, a Houston-based investment bank specializing in the energy sector - the world’s largest specialist energy investment bank).

CHILLING! Simmons mentioned the real possibility of shortages this winter - demand exceeding supply by 2-5 million barrels per day. Julian Lee mentioned that it would take five years to get over the problem of limited refinery capacity.

The consequences for the economy, and the housing market, would of course be severe.

By the way, I've heard that the French have just threatened their oil companies with higher windfall taxes if they didn't cut prices (and profiteering) - guess what - prices fell immediately. I haven't double checked this, but found this out from an ex-colleague from an oil company I used to work for. It's probably in the news already.

Edited by gruffydd

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So someone in a big bank comes on the TV saying there might be oil shortages and, guess what, oil prices soar this week? Hmmm.... Is there a www.oilpricecrash.co.uk where people can follow the oil bubble?

What does 'VI' stand for?

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I'm not sure it's that clear-cut. I've noticed many from the oil industry playing down the risks of a winter shortage over the last few days. Julian Lee works forCGES

Edited by gruffydd

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So someone in a big bank comes on the TV saying there might be oil shortages and, guess what, oil prices soar this week? Hmmm.... Is there a www.oilpricecrash.co.uk where people can follow the oil bubble?

What does 'VI' stand for?

Yeah, it's like all the very cold winter crap last year.

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So someone in a big bank comes on the TV saying there might be oil shortages and, guess what, oil prices soar this week?

Soar?

Oil futures for January '06 are $5 _below_ where they were after Katrina hit.

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By the way, I've heard that the French have just threatened their oil companies with higher windfall taxes if they didn't cut prices (and profiteering) - guess what - prices fell immediately. [gruffydd]

'Oil firms act to avert French tax':

http://news.bbc.co.uk/2/hi/business/4231650.stm

Oil giants BP and Total have agreed to cut French fuel prices after government threats to levy a new tax on oil firms in the face of soaring crude prices.

From 'Brown Told: Cut Fuel Duty':

http://*******.com/9pgcs

Fuel duty has now been frozen since October 2003, but it remains among the highest in Europe at 47.1p per litre. In France only 24p of the 85.2p drivers pay at the pumps per litre is duty.

[...snip...]

Britain 91.82.

Assuming these figures were correct and contemporaneous the pre-tax price in France appears to be over 50% more than in the UK:

Britsh pre-tax price = 91.82 / 1.175 - 47.1 = 31.1p per litre.

French pre-tax price = 85.2 / 1.196 - 24 = 47.2p per litre.

(French VAT is 19.6%).

This suggests that French petrol distributors and/or retailers make much higher profits than their UK counterparts (unless dramatically less efficient).

Oil futures for January '06 are $5 _below_ where they were after Katrina hit. [MarkG]

A case of 'buy rumour, sell fact'?

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Oil futures for January '06 are $5 _below_ where they were after Katrina hit. [MarkG]

A case of 'buy rumour, sell fact'?

More a case of refinery capacity outage forcing a reduction in crude oil consumption, US oil import through LOOP out of action meaning the super tankers en route to the US have been redirected elsewhere, EU and US releases from strategic reserves and the very likely chance of Katrina knocking the US into recession. Oil prices could well fall for the next few months whilst petrol, diesel, heating oil and natural gas prices rise.

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Have we not learnt the dot.con lesson - all these 'experts' coming on TV, writing in the media how such and such company was a great stock to buy... and then we all went out and bought it only to discover that the boy who recommended it was already heavy in the stock and made a killing when the mugs en masse bought on his recommendations?

There are, IMPO, plenty of boys in the financial world still doing this - but now they do it in gold, in silver, in oil and anything else they can get away with.

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Vi = Vested Interest.

I have been thinking this weekend about oil & petrol prices, well I drive a 2.5ltr and i'm thinking of selling and getting a more economical car. How high do you think petrol at the pumps will get? and do you think I should replace my car?

If you have any other opinions on how to improve/change my life, do let me know!

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Have we not learnt the dot.con lesson - all these 'experts' coming on TV, writing in the media how such and such company was a great stock to buy... and then we all went out and bought it only to discover that the boy who recommended it was already heavy in the stock and made a killing when the mugs en masse bought on his recommendations?

There are, IMPO, plenty of boys in the financial world still doing this - but now they do it in gold, in silver, in oil and anything else they can get away with.

Sorry but I don't think it is that easy to be a speculator in the oil markets, so there's no point in anyone ramping it up to joe public. High prices are a reflection of a genuine problem.

Most oil futures involve an element of physical delivery, so if you mess your position up on the IPE you could find yourself having to take delivery of a barge of gasoil in Holland (in a worst case scenario).

So as far as I'm aware there is not an easy way to play the oil futures in the same way there is shares, although someone please correct me if I'm wrong!!!

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Sorry but I don't think it is that easy to be a speculator in the oil markets, so there's no point in anyone ramping it up to joe public. High prices are a reflection of a genuine problem.

Most oil futures involve an element of physical delivery, so if you mess your position up on the IPE you could find yourself having to take delivery of a barge of gasoil in Holland (in a worst case scenario).

So as far as I'm aware there is not an easy way to play the oil futures in the same way there is shares, although someone please correct me if I'm wrong!!!

Most commodity-based futures contracts are closed out before expiry or rolled into the next contract. Very few end up as a physical. Options on futures contracts would be another way to play oil, or buy oil-related equity like the TSX. :D

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Vi = Vested Interest.

I have been thinking this weekend about oil & petrol prices, well I drive a 2.5ltr and i'm thinking of selling and getting a more economical car.  How high do you think petrol at the pumps will get? and do you think I should replace my car?

If you have any other opinions on how to improve/change my life, do let me know!

Oooooh... they'll get VERY high. Yes, yes, you should replace your car ASAP. I'll tell you what, swap it for my small old diesel; it economical, reliable, and you'll feel instantly better about yourself for not polluting the planet as much. I shan't even charge you extra for the accumulated debris inside, amongst which you shall surely find many treasures.

BTW... before I'm committed to this, it's not a transit van is it? :unsure:

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I just don't see how oil supply vs demand can get so critical so quickly.

I don't believe in less than a year it can tilt so quickly, there is rampant speculation going on, panic and profiteering.

Think back to the big power scandal in Calfornia and the USA recently, manipulation of energy by big business is nothing new.

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If you have, say, 500,000 barrels per day surplus capacity then you add another 1.5 million barrels per day to demand over 12 months then it gets critical real fast.

And if you then knock out enough refineries to push refinery capacity below refined product demand then you have a surplus of crude oil so the price should fall (which it is) but a shortage of refined products.

I do think oil prices will fall though for the simple reason that the fundamentals (economy) are being undermined by those very prices. Expensive energy and economic growth just don't mix whereas the market seems to think this is some sort of "new era". So yes I do think there's a degree of bubble at the moment.

This winter really depends on how quickly gas production in the Gulf of Mexico is restored since that will have a significant impact on oil product demand. And of course the weather. I can see that we could end up in real trouble in a worst case scenario but it could just as easily be mild and oil prices fall. Rainfall into key hydro-electric catchments is another variable that affects oil demand.

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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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