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Oil Back Over $75 Pb

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Like I said the bluff has been called.

Next time the central banks try to jawbone the market rater than actually doing their job the commodities market won't bother listening.

Oil could be going a LOT higher (by the rate of money printing at least) whilst this situation continues.

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Like I said the bluff has been called.

Next time the central banks try to jawbone the market rater than actually doing their job the commodities market won't bother listening.

Oil could be going a LOT higher (by the rate of money printing at least) whilst this situation continues.

Exactly - all that Banana-skin Ben's dove coo's have done is give the green light for commodity prices to take off

Mind you, we're lucky here in UK that rising commodity prices aren't allowed to feed through to inflation - phew! - thanks Gordon, Merv

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Just been looking at the NYMEX futures quotes. High $77's for most of '07 and $78 for the March '07.

$80 bp is not looking that far away any more.

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Just been looking at the NYMEX futures quotes. High $77's for most of '07 and $78 for the March '07.

$80 bp is not looking that far away any more.

It's OK thought because oil has gone from $10 - $75 since 1996 and has had no effect on inflation

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It's OK thought because oil has gone from $10 - $75 since 1996 and has had no effect on inflation

Yeh! Mainly because during that time manufacturing has moved to the Far East and cut its labour costs. The effect of that process is short lived, it is a one off action for a given producer.

Oil price rises are impacting the Far East and driving costs up there as well as here. I also noted that the Chinese Minimum Wage was to be increased by 20% this year.

I suspect that falling prices for imported manufactured goods is going to be a thing of the past in the not too distant future. Indeed, if the latest import price data (for manufactured goods) is correct then the prices are already increasing.

Manufactured goods prices starting to rise as well as utility and fuel prices and inflation is heading up, fast. Hence this warning from the Organisation for Economic Co-operation and Development.

http://news.independent.co.uk/business/new...icle1160995.ece

The Organisation for Economic Co-operation and Development, which covers 30 countries including the UK, said prices increased at an annual rate of 3.1 per cent in May. This was up from 2.7 per cent in April and was the highest since September 2001, apartfrom a blip towards the end of last year.

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Yeh! Mainly because during that time manufacturing has moved to the Far East and cut its labour costs. The effect of that process is short lived, it is a one off action for a given producer.

Oil price rises are impacting the Far East and driving costs up there as well as here. I also noted that the Chinese Minimum Wage was to be increased by 20% this year.

I suspect that falling prices for imported manufactured goods is going to be a thing of the past in the not too distant future. Indeed, if the latest import price data (for manufactured goods) is correct then the prices are already increasing.

Manufactured goods prices starting to rise as well as utility and fuel prices and inflation is heading up, fast. Hence this warning from the Organisation for Economic Co-operation and Development.

http://news.independent.co.uk/business/new...icle1160995.ece

Last BoE report stated that import inflation was picking up, highest in 5 years. The 'china' effect is indeed a one off effect as prices couldn't go on getting cheaper.

Interestingly though, even though import inflation is predicted to rise the BoE still sees no reason to raise IRs

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Last BoE report stated that import inflation was picking up, highest in 5 years. The 'china' effect is indeed a one off effect as prices couldn't go on getting cheaper.

Thanks for the reminder (couldn't remember where I read it).

Interestingly though, even though import inflation is predicted to rise the BoE still sees no reason to raise IRs

I bet they do. It is the timing they are not sure of. I recon they are sitting there with fingers, toes and anything else they can cross, crossed. :lol:

If I was on the MPC I would be seriously stressed at this moment in time. Why, because if I pushed rates up too soon I would be hung drawn and quartered for crashing the Housing Market and causing a recession. :huh: (Nothing to do with stupid lending and reckless spending, of course, muppits :angry: )

Much better to leave it and react to others rate hikes and blame it on Johnny Foriegner! A good scapegoat in the British psychy... With any luck, by the time the muppits worked it all out I could be long gone... :lol:

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You have seen nothing yet. We are on our way to the $100 mark if history repeats itself. :(

Time to do a Jimmy Savile and buy yourself a garage. :D

The peak oil buffs (the oil company geologists who have turned bearish) having be talk $100 for a couple of years now. Many are now talking $120 pb as something that is really close. I have even read something in which one buff said he could see no reason why it shouldn't go to $200 pb. :o

The point is unless we break our addiction to oil we are in big trouble.

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Officially above $78

http://uk.biz.yahoo.com/14072006/325/oil-hits-record-78.html

SYDNEY (Reuters) - Oil prices surged to record highs above $78 on Friday as global geopolitical storm clouds gathered, with supply disruption in OPEC exporter Nigeria and tensions across the Middle East driving crude into unchartered territory.

Oil precipitated the last 2 HPCs.

GOLD 07/14/2006 04:03 660.30 661.30

+7.80

Dr. Bubb was right, not just about the HPC as indicated by the falling housing stocks but about gold heading inexorably upward. It may prove to be a decent place to hang out while the other assets collapse. With Japan on the move now IR sensitive assets such as houses will be hit hard. Stocks are in freefall this morning and we could be on the verge of another 1987 with some major 5-10% falls. Its the perfect storm with turmoil in the ME, oil going bserk, IR on the march, political turmoil at No. 10, rising deficits at No. 11 and the BoE frozen in the headlights.

Edited by Realistbear

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I would like to know what all the idiots that said that oil price rises would "drop out" of the inflation figures this year have to say about this.

If he hasn't done so already. Gordon must be planning to drop oil prices out of the basket or any other inflation measuring device to keep the CPI in line with the 2% target.

(faints at RB admitting Gold is a good place to be...)

For some it may be a good place. I am too risk averse to get into any commodities right now. If everything continues to tank gold will probably tank the least. Oil shares and armaments anyone?

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Putin will soon be adding to the oil woes:

http://www.thisismoney.co.uk/news/columnis...;in_author_id=1

Putin has West over a barrel

Alex Brummer, Daily Mail

13 July 2006

ANYONE counting on high oil prices retreating into the distance will be greatly disappointed by the latest forecast from the International Energy Agency.
It predicts that world demand for the black stuff will soar by 1.57m barrels a day to 86.4m barrels in 2007 to fuel economic growth.
This cannot be good news. The oil price has already crept up to $75 a barrel on futures markets in the last few days, bolstered by rising Middle East security concerns. Iran is showing increasing defiance in the face of Western demands that it trims its nuclear ambitions.
....../
President Putin literally has the world over a barrel. It is not a good place for the Western democracies to be.

Inflation anyone is right. HPC too so its not all bad news. :)

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Guest Cletus VanDamme

Given the damage these skyrocketing oil prices are causing, why aren't the powers that be doing more to solve the perpetual middle east crisis? If I was in power in the US I'd be saying to Israel, sort this out or we stop bankrolling you. Enough already. And I'd be doing a deal with Iran to sort out Hezbollah too.

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Given the damage these skyrocketing oil prices are causing, why aren't the powers that be doing more to solve the perpetual middle east crisis? If I was in power in the US I'd be saying to Israel, sort this out or we stop bankrolling you. Enough already. And I'd be doing a deal with Iran to sort out Hezbollah too.

"Perpetual" is a good way of looking at it. The problem began in about 2500 BC. Apart from a break after the Romans dispersed the Jews in 70 AD its a never ending saga. The end game is predicted to be the final curtain on civilisation as we know it.

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Guest Cletus VanDamme

"Perpetual" is a good way of looking at it. The problem began in about 2500 BC. Apart from a break after the Romans dispersed the Jews in 70 AD its a never ending saga. The end game is predicted to be the final curtain on civilisation as we know it.

It's often been said this is where civilization started and this is where it will end!

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The peak oil buffs (the oil company geologists who have turned bearish) having be talk $100 for a couple of years now. Many are now talking $120 pb as something that is really close. I have even read something in which one buff said he could see no reason why it shouldn't go to $200 pb. :o

The point is unless we break our addiction to oil we are in big trouble.

I first became aware of the oil situation in 1988 and have been following it on an off ever since. I became sufficiently concerned by 1992 to do some serious research into it and ended up working as a consultant in the industry in 2000.

Suffice to say that NOTHING that has happened affecting oil or oil prices so far has surprised me in any way whatsoever. All the ups and downs, wars and so on are "noise" on the bigger picture of a diminishing resource for which demand is rising.

The day will come when the rise from $75 to $100 per barrel is likewise nothing more than "noise". That day may not be as far off as many think.

So far, the market has been balanced by removing the less important uses of oil for which replacements are available (electricity generation, heating etc). Once that runs out, when practically all oil is being used for hard to replace things like transport and chemicals then there is no more easy demand destruction.

Short term, we haven't run out (worldwide) of oil-fired power stations and heaters to scrap or convert but they are diminishing as a % use of oil. As supply fails to grow (peak oil) and transport etc demand rises in the likes of China, the remaining power plants and heaters will be scrapped increasingly quickly as prices continue to rise. Likewise the marginal car trips on Sunday afternoon etc will go relatively early (already going?) too. Then comes the hard stuff like flights and car trips that are actually useful to get from A to B and that's when the real pain starts.

So if you want to take lots of air travel etc. then IMO you ought to get on with it over the next 5 years (at the most) or forget it altogether. Likewise anything else that involves using lots of oil. :(

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So if you want to take lots of air travel etc. then IMO you ought to get on with it over the next 5 years (at the most) or forget it altogether. Likewise anything else that involves using lots of oil. :(

.... including eating food produced on a scale required for current world population, being able to earn more than you spend travelling to work, working in industries that are only possible because cheap transport has allowed people to spend their money on toys, etc. Welcome to the future.

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  • 301 Brexit, House prices and Summer 2020

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