Market Turmoil As Iea Warns 'age Of Cheap Oil Is Over'

[interestrateripoff]

http://www.independent.co.uk/news/business/news/market-turmoil-as-iea-warns-age-of-cheap-oil-is-over-2230581.html

Growing fears of an enduring oil crisis prompted huge volatility on investment markets yesterday – with shares in the world's biggest oil producer, Saudi Arabia, slumping to a 22-month low – as a top energy official warned that the "age of cheap oil is over".

Concerns about the turmoil in Libya triggered sharp sell-offs in stock markets across the Gulf, with shares in Kuwait and Dubai sliding to six-year lows. Oil prices also remained volatile throughout yesterday, with Brent crude futures for April delivery breaching the $117 (£72) per barrel mark in late afternoon trading.

In London, the FTSE 100 fell sharply in the morning, declining by more than 2 per cent at one point, before recovering to close only slightly lower on the day.

The nerves among investors were evident in the movements in the gold price, which touched a record high above $1,440 per ounce. The yellow metal, the traditional destination for investors seeking to preserve their wealth during times of turmoil, was up 6 per cent in February, recording its biggest monthly rise since August.

Last night's swings came as the chief economist of the International Energy Agency, Fatih Birol, warned that the world may have to face up to the prospect of high oil prices over the long term. "The age of cheap oil is over, though policy action could bring lower international prices than would otherwise be the case," he said.

Mr Birol also struck a note of caution on Europe's recovery prospects as the continent deals with increased fuel costs. "Europe is the weakest link in the chain of economic recovery," he said. "75 per cent of gas prices [in Europe] are linked to oil prices. In a few months gas prices are going to increase."

On the other side of the Atlantic, the US Energy Secretary, Steven Chu, added his voice to the growing chorus of concern about rising oil prices. "Today's spike in oil prices is causing great concern, great hardship [for] the American people," he said while testifying before the US Congress. "We have a very delicate recovery going on and an increase in prices will make that vulnerable."

Steven Chu doesn't appear on message here the Ben Bernanke said it wasn't a problem!

I know this prediction has been said many times, but if this is the turning point what now for economic growth which has been built on cheap oil?

Also it would appear that this is possible going to trigger a bank crisis in Europe, on another thread I stated oil at $150 a barrel would trigger a European bank crisis.

[MrFlibble]

Game over man, game over!

TPTB are handling the upcoming energy crisis just they they handled the financial crisis - by sticking their heads in the sand and hoping it goes away/doesn't happen.

I'm looking forward to watching as they try and print there way out of this problem

[aa3]

Maybe its the time of the year, but I noticed the roads had a lot less traffic on them over the last week.

I was talking to a woman and she was debating whether or not to go and see her friends which was a 40 mile drive each way. I guestimated the round trip cost for her would be £12 pounds in petrol.

This is a trip she does at least once a week. But the costs are getting so high she is having to cut back in places.

[efdemin]

Maybe its the time of the year, but I noticed the roads had a lot less traffic on them over the last week.

I was talking to a woman and she was debating whether or not to go and see her friends which was a 40 mile drive each way. I guestimated the round trip cost for her would be £12 pounds in petrol.

This is a trip she does at least once a week. But the costs are getting so high she is having to cut back in places.

It was half-term last week.

[blackgoose]

Maybe its the time of the year, but I noticed the roads had a lot less traffic on them over the last week.

I was talking to a woman and she was debating whether or not to go and see her friends which was a 40 mile drive each way. I guestimated the round trip cost for her would be £12 pounds in petrol.

This is a trip she does at least once a week. But the costs are getting so high she is having to cut back in places.

She should consider more environmentally friendly options instead. Such as bus/ train or even just skype.

[interestrateripoff]

Maybe its the time of the year, but I noticed the roads had a lot less traffic on them over the last week.

I've been noticing this for months around our area. There's a lot less traffic at the weekends.

[dances with sheeple]

I've been noticing this for months around our area. There's a lot less traffic at the weekends.

Noticing it here in Edinburgh, the "will drive because I can drive" mentality is taking a bit of a beating IMO, roads seem much quieter . I would love to see the sheeple forced out of their cars, but the consequences of a real oil price shock could be very bad?

[spongeh]

These quiet roads are brilliant, long may they continue

[dances with sheeple]

If turmoil in these regions means real supply interruptions/shut downs, does this mean rates will have to go up in the UK? is massive HPC then guaranteed? Will the sheeple kick off and go Zombie on each other as a result?

[fluffy666]

Game over man, game over!

TPTB are handling the upcoming energy crisis just they they handled the financial crisis - by sticking their heads in the sand and hoping it goes away/doesn't happen.

I'm looking forward to watching as they try and print there way out of this problem

We live (in the west) in a political landscape utterly dominated by economists, generally of a pretty fundamentalist stripe. Therefore the only solutions that we are allowed to consider for any problem are economist's - i.e. ones that work through markets.

We are certainly NOT allowed to have a look at the basic physics and geology of energy supply and just build a solution. I mean, how are GS meant to make a profit out of that?

[sophia]

Here in Northern Ireland the oil prices are an absolute joke, everybody (even those with 2 slaries) are skint!

My husband spends about £200 month on oil just to commute and the wages here are lower. I drive a 1 litre Yaris which isn't too bad.

Home heating oil is also a fortune, so im making briquettes with my briquette make, drying them out and putting them in multi fuel burner for some free heat!!!

[fluffy666]

If turmoil in these regions means real supply interruptions/shut downs, does this mean rates will have to go up in the UK? is massive HPC then guaranteed? Will the sheeple kick off and go Zombie on each other as a result?

Roughly speaking, each 1% interest rise costs me ~£65/month (£130k mortgage on repayment, 15 years left).

That's about the same as the run up in petrol from 95p to 130p/liter.

The problem is, you would have to hike IRs massively to raise the currency enough to make a dent on petrol prices, and in doing so half the mortgagees in the country would default.

[interestrateripoff]

Roughly speaking, each 1% interest rise costs me ~£65/month (£130k mortgage on repayment, 15 years left).

That's about the same as the run up in petrol from 95p to 130p/liter.

The problem is, you would have to hike IRs massively to raise the currency enough to make a dent on petrol prices, and in doing so half the mortgagees in the country would default.

Rock and a hard place.

It's system failure.

[winkie]

How long before we see 'rent a passenger' or 'share a ride'........saw a hitchhiker the other day, quite common in the 1970s.

Train fares can be reasonable if there is only yourself but a couple of adults and kids and the price is not right... you also have to take into account the station car parking fees or the cost of travel to and from the station....they don't like bikes on trains......for some people the train station can be over 10 miles away, with one bus a day if you are lucky.

[Ruffneck]

I would love to see the sheeple forced out of their cars, but the consequences of a real oil price shock could be very bad?

Yes , because everyone who drives cars is a sheep.

God bless the cycling elves who deliver stuff you order over the internet.

[Agentimmo]

The number of "spur of the moment" type car journeys is falling. My kid wanted to visit her school friend at the weekend. Round trip of 50KM. Took her there and back on Sat.

She asked to go again Sun. I refused, saying her dad could make the trip and bring his kid to our place.

I live in a middle sized town with decent transport links. A lot of her friend's parents chose to buy the dream in the back-country, miles from civilization. They are now moaning that the cost of petrol is hitting their budgets quite hard. 80-120€ per month, with 2 cars. about 160-240€ / month, plus all the additional costs.

My kid can get on a bus/train to town, for 1€ per day. She's also got a bike. Her less mobile friends are now envious......."the times they are a changing".

[stuckmojo]

Yes , because everyone who drives cars is a sheep.

God bless the cycling elves who deliver stuff you order over the internet.

thanks for this, I had the first genuine laugh in a long time.

[aa3]

The number of "spur of the moment" type car journeys is falling. My kid wanted to visit her school friend at the weekend. Round trip of 50KM. Took her there and back on Sat.

She asked to go again Sun. I refused, saying her dad could make the trip and bring his kid to our place.

I live in a middle sized town with decent transport links. A lot of her friend's parents chose to buy the dream in the back-country, miles from civilization. They are now moaning that the cost of petrol is hitting their budgets quite hard. 80-120€ per month, with 2 cars. about 160-240€ / month, plus all the additional costs.

My kid can get on a bus/train to town, for 1€ per day. She's also got a bike. Her less mobile friends are now envious......."the times they are a changing".

I live not far from the center of my city too. Everything I need is right close by. A lot of people bought acreages out in the back-country, and to get anywhere they have to drive past a lot of other acreages each way.

Personally I made he choice to live in a smaller lot and house because I couldn't stand the time of driving that far everytime I wanted to go out. But it seems the oil costs are a decent benefit now.

[chronyx]

Yes , because everyone who drives cars is a sheep.

God bless the cycling elves who deliver stuff you order over the internet.

I would love cycle couriering to pay a decent wage, maybe this makes it more of a reality! I

[MongerOfDoom]

Maybe its the time of the year, but I noticed the roads had a lot less traffic on them over the last week.

I was talking to a woman and she was debating whether or not to go and see her friends which was a 40 mile drive each way. I guestimated the round trip cost for her would be £12 pounds in petrol.

I wish the reason was that people could no longer afford petrol. For a start, I would not need to worry about peak oil for at least a decade after it happens if less than 20p extra a liter makes people cut down on driving. Sadly, I don't see a marked decrease in traffic, and for shortish journeys into cities the cost of petrol is still trivial compared to the cost of parking, yet it's still hard to find a parking place. People still have plenty of money. Not surprising given there is a recovery going on :-)