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Oil Price Falls As Us Gasoline Demand Wanes

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http://www.telegraph.co.uk/money/main.jhtm...24/cnoil124.xml

The price of oil looks set to fall further in the coming days despite continued hurricane fears and concern over the political impasse between the United States and Iran.

Energy analysts argue that the value of "black gold" will see further reductions - having already fallen around $20 from highs above $147 a barrel just a week and a half ago.

Light sweet crude for September delivery fell $2.64 to $125.78 a barrel in trading on the New York Mercantile Exchange (NYMEX), adding to a $3 fall in the previous day's session. In London, the cost of a barrel of Brent crude fell a further $2 to trade just above $127 a barrel.

Rob Laughlin, senior energy broker for MF Global, says that all of a sudden stocks are being viewed as cheap. "We've seen the exiting of some of the speculative fund money re-entering equity markets," he said. "It's the first time we've seen this since February/March time."

He also believes that a reining in of consumption by what he calls "Mr and Mrs America" has also helped, as seen in recent data from Mastercard that showed US petrol demand fell 3.3pc last week, its 13th consecutive weekly fall.

A temporary lull in price???

Will we still get big gas price rises if oil falls, would BG etc.... get away with it?

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A temporary lull in price???

Will we still get big gas price rises if oil falls, would BG etc.... get away with it?

I have a suspision that the whole 'gas price linked to oil price' thing is the New Excuse as to why our gas bills are so high. As opposed to the 'government has whistled whilst burning through all our gas reserves' reason.

One of the predictions of peak oil is that we'll see a lot of price spikes/demand drops/price drops over the next decade or so as the supply/demand balance seesaws. Thus helping to wreck the chances of a permenant market driven fix..

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If oil was to come down then Brown & Co would add more tax so they can play in the sun even more than they do now.

Personal Carbon Taxes are possible once we have all been fitted with RFID's

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Because they are now NOT attacking Iran they relesed oil from their SR on the hush,hush. Next Year Mexico STOPS exporting to America!

Mike

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US opening a form of Embassy in Tehran and a sea chnage in Iraq where "insurgency" has dropped dramatically--primarily due to the locals getting fed up wtih the warlords and their religious violence.

If Iraq is at peace (100% peace will never happen in the world) in the next few months and a deal is cut with Iran it will give GWB one helluva positive legacy. Now we wouldn't want that would we?

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US opening a form of Embassy in Tehran and a sea chnage in Iraq where "insurgency" has dropped dramatically--primarily due to the locals getting fed up wtih the warlords and their religious violence.

If Iraq is at peace (100% peace will never happen in the world) in the next few months and a deal is cut with Iran it will give GWB one helluva positive legacy. Now we wouldn't want that would we?

Positive Legacy? If the Iraq invasion hadn't been so botched then it would not have taken 5 years and a million or so dead - plus plenty of ethnic cleansing - to pacify the place. If I set your house on fire, can I take credit when the fire goes out?

As for Iran.. yes, they have finally worked out that sabre rattling plays straight into Iranian hands. Domestic problems will dispose of the hardliners quickly enough if they don't have external enemies to rave at.

Iraq could put up to another 5 million barrels a day onto the oil market over the next decade or so given full-on western investment, far more than any other potential source. Useful.. but enough?

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Guest Steve Cook
If oil was to come down then Brown & Co would add more tax so they can play in the sun even more than they do now.

Personal Carbon Taxes are possible once we have all been fitted with RFID's

I guess I would argue that a formal scheme to implement carbon capping is not ultimately necessary. Working on the assumption that fiat money is merely the final abstracted representation of all of the economic activity in an economy, and that all of the economic activity is the work done as a result of all of the energy available to an economy, it is simple matter to determine the carbon footprint of any individual. Just take a look at their pay packet. In other words, we already have an informal carbon credit scheme in place. It's the amount that people earn or hold in monetary wealth.

As the carbon fossil reserves become ever more depleted, we will all become progressively poorer than we were before. Obviously, though, some people will become much more relatively poorer than others. As it was ever thus. The purpose of a formalised carbon capping scheme is presumably to endeavour to ensure that such wealth discepencies are mitigated against or even eliminated. A kind of energetic socialism, if you like. The alternative would be to have a scheme in place in which the economically more wealthy (meaning the energetically more wealthy, since they both ultimately mean the same thing) are allowed to preserve their priviledged status. However, if this kind of modified allocation is allowed, it would make the point of such a scheme somewhat obsolete, since our differential wealth as things stand, serves the same purpose.

Whether we implement a formal capping scheme or not, carbon usage overall is going to be capped anyway as a function of a contracting global economy.

Edited by Steve Cook

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A temporary lull in price???

There's the small matter of sizeable demand destruction that was there for all to see lately. Crude was supported by excessive consumption of magic mushrooms by traders these last few weeks.

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All I want to know if which hedge fund is going bust on this sudden drop in the oil price.

Someone, somewhere must have bet too big on it the wrong way.

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This is all just wishful thinking on the part of economists and politicians in a bid to justify rate cuts in order to get the massess borrowing again to stop house prices falling further to prop up our sick economies.

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I guess I would argue that a formal scheme to implement carbon capping is not ultimately necessary. Working on the assumption that fiat money is merely the final abstracted representation of all of the economic activity in an economy, and that all of the economic activity is the work done as a result of all of the energy available to an economy, it is simple matter to determine the carbon footprint of any individual. Just take a look at their pay packet. In other words, we already have an informal carbon credit scheme in place. It's the amount that people earn or hold in monetary wealth.

As the carbon fossil reserves become ever more depleted, we will all become progressively poorer than we were before. Obviously, though, some people will become much more relatively poorer than others. As it was ever thus. The purpose of a formalised carbon capping scheme is presumably to endeavour to ensure that such wealth discepencies are mitigated against or even eliminated. A kind of energetic socialism, if you like. The alternative would be to have a scheme in place in which the economically more wealthy (meaning the energetically more wealthy, since they both ultimately mean the same thing) are allowed to preserve their priviledged status. However, if this kind of modified allocation is allowed, it would make the point of such a scheme somewhat obsolete, since our differential wealth as things stand, serves the same purpose.

Whether we implement a formal capping scheme or not, carbon usage overall is going to be capped anyway as a function of a contracting global economy.

I don't know if I agree.

does a writer who makes million have a higher energy usage than a lorry driver?

they MIGHT spend/use more but it's not all that cut and dry.

or take a country like Switzerland, per capita they might make a lot more than say Russia, but Russian industries are so much more energy intensive that their per capita use could be worse.

unless I am misunderstanding what you are saying.

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Some bloke on the radio said it was because the dollar strengthened slightly the other day.

I dont think we'll ever have 'cheap oil' again, but id agree with some of the people ive heard say its as much a weak dollar as expensive oil. I cant see why the dollar would regain much strength though.

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Though I doubt we will see cheap oil again in our lifetimes. I reckon the recent price peak was a deliberately engineered bubble that is now over. Some smart people in fancy suits have made an awful lot of money from the masses. now they might move onto ramping up speculation in a new field, possibly carbon trading and in the longer term 'personal carbon trading' which could have an equally harmful effect on our lives. Perhaps agriculture? I don't know really I'll just wait to see which commodity or similar the (corporate owned) mainstream media start to peddle scare stories about.

Edited by researchmug

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All I want to know if which hedge fund is going bust on this sudden drop in the oil price.

Someone, somewhere must have bet too big on it the wrong way.

I think it more likely that hedge funds were taking the short side rather than the long... this is my interpretation of the prominence of commodity index funds like S&P's GSCI which invests in a mixture of futures and OTC trades... always going long and sold primarily to institutional investors - such as pension funds.

Given the high ratio of other contracts on oil to oil futures, it seemed obvious to me that, at some point, S & P would stop buying oil futures and only buy OTC contracts - hence causing massive demand destruction for oil futures and a corresponding drop in their price. I am not sure if this would indicate mere stupidity on the part of pension fund managers - or (likely legal) corruption whereby S&P lets it be known to preferred investors when it intends to switch emphasis from futures to OTCs - and, thereby, manipulate the price of oil.

On my part it is all conjecture - but it seems credible that commodity indices are key to understanding recent events.

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Though I doubt we will see cheap oil again in our lifetimes. I reckon the recent price peak was a deliberately engineered bubble that is now over. Some smart people in fancy suits have made an awful lot of money from the masses. now they might move onto ramping up speculation in a new field, possibly carbon trading and in the longer term 'personal carbon trading' which could have an equally harmful effect on our lives. Perhaps agriculture? I don't know really I'll just wait to see which commodity or similar the (corporate owned) mainstream media start to peddle scare stories about.

Also the news that 90 billion barrels (about three years of global supply) is under the arctic might be helping. In my view, if oil prices drop back down much more, the MPC and other piggies around the world will be able to justify holding rates or even dropping them, in the hope of getting all the plebs out buying houses and cars over-valued by 250%. Rate cuts could fight off the credit crunch and house prices could seriously be maintained at this ******ing ridiculous level.

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Also the news that 90 billion barrels (about three years of global supply) is under the arctic might be helping.

It will take many years to get such oil out, so it would be unlikely to affect the current price,

Peter.

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Also the news that 90 billion barrels (about three years of global supply) is under the arctic might be helping. In my view, if oil prices drop back down much more, the MPC and other piggies around the world will be able to justify holding rates or even dropping them, in the hope of getting all the plebs out buying houses and cars over-valued by 250%. Rate cuts could fight off the credit crunch and house prices could seriously be maintained at this ******ing ridiculous level.

So, how much of the 90 Billion barrels has been proven by drilling?

There's also the minor technical issue of siting oil rigs in pack ice. If we dee a drop of this oil prior to 2020 I'd be surprised. And it won't go that far to replacing the 400 billion barrels we plan to consume between now and then..

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now they might move onto ramping up speculation in a new field, possibly carbon trading and in the longer term 'personal carbon trading' which could have an equally harmful effect on our lives. Perhaps agriculture? I don't know really I'll just wait to see which commodity or similar the (corporate owned) mainstream media start to peddle scare stories about.

A lot of people seem to keep pushing water of all things. I think theyre just taking the p1ss with that one, next it will be sand or air or lying politicians or something.

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Also the news that 90 billion barrels (about three years of global supply) is under the arctic might be helping. In my view, if oil prices drop back down much more, the MPC and other piggies around the world will be able to justify holding rates or even dropping them, in the hope of getting all the plebs out buying houses and cars over-valued by 250%. Rate cuts could fight off the credit crunch and house prices could seriously be maintained at this ******ing ridiculous level.
I can't see this, myself, so have hope! It would require a hell of a drop in the base rate to kick-start even a temporary rally in house prices given that (i) the banks would almost certainly not pass enough of it on to the consumer in their precarious situation; (ii) the genie is already out of the bottle in terms of negative psychology, especially in FTB expectations; (iii) medium to long-term rises in the cost of living in high profile areas (energy; petrol; CTax; university fees post 2009-10) even assuming oil pulls back to around $100 a barrel; and (iv) and the general negativity about debt that seems finally to have shocked people out of their complacency. We are all going to be poorer, in a poorer world, faced with the reality of adapting to (rather than mitigating) climate change - but those with any common financial sense, savings, and a decent job will at least be able to afford a 'nice' house in this messed up world by the time the Kyoto Protocol lapses in 2012. Have faith - this is the big one!

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I can't see this, myself, so have hope! It would require a hell of a drop in the base rate to kick-start even a temporary rally in house prices given that (i) the banks would almost certainly not pass enough of it on to the consumer in their precarious situation; (ii) the genie is already out of the bottle in terms of negative psychology, especially in FTB expectations; (iii) medium to long-term rises in the cost of living in high profile areas (energy; petrol; CTax; university fees post 2009-10) even assuming oil pulls back to around $100 a barrel; and (iv) and the general negativity about debt that seems finally to have shocked people out of their complacency. We are all going to be poorer, in a poorer world, faced with the reality of adapting to (rather than mitigating) climate change - but those with any common financial sense, savings, and a decent job will at least be able to afford a 'nice' house in this messed up world by the time the Kyoto Protocol lapses in 2012. Have faith - this is the big one!

Thanks. That beared me up. The bear is back. There is no way prices can stay where they are because FTBs have tasted blood. That's better. Now, I need to lay down.

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I guess I would argue that a formal scheme to implement carbon capping is not ultimately necessary. Working on the assumption that fiat money is merely the final abstracted representation of all of the economic activity in an economy, and that all of the economic activity is the work done as a result of all of the energy available to an economy, it is simple matter to determine the carbon footprint of any individual. Just take a look at their pay packet. In other words, we already have an informal carbon credit scheme in place. It's the amount that people earn or hold in monetary wealth.

As the carbon fossil reserves become ever more depleted, we will all become progressively poorer than we were before. Obviously, though, some people will become much more relatively poorer than others. As it was ever thus. The purpose of a formalised carbon capping scheme is presumably to endeavour to ensure that such wealth discepencies are mitigated against or even eliminated. A kind of energetic socialism, if you like. The alternative would be to have a scheme in place in which the economically more wealthy (meaning the energetically more wealthy, since they both ultimately mean the same thing) are allowed to preserve their priviledged status. However, if this kind of modified allocation is allowed, it would make the point of such a scheme somewhat obsolete, since our differential wealth as things stand, serves the same purpose.

Whether we implement a formal capping scheme or not, carbon usage overall is going to be capped anyway as a function of a contracting global economy.

Money can certainly be viewed as an abstraction of energy-entitlement, but like all abstractions it doesn't capture the detail. E.g. an object painstakingly made by an artisan vs buying 100 similar things made by energy-intensive industry for the same price -- human time and skill substituted for energy in the production of value.

Also, the entitlement doesn't scale equitably with the amount of money held -- to give the extreme example, those on subsistence incomes will get less carbon-bang for their buck than those who can afford to book a ride on the space shuttle. A trading scheme would presumably smooth this out.

We've seen rationing before in a time of national emergency, and I certainly wouldn't be surprised to see some form of it again...

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I don't know if I agree.

does a writer who makes million have a higher energy usage than a lorry driver?

Remember that part of the lorry driver's diesel would be for the writer's account, if the lorry is full of books ;)

Same for the energy used by the printer and bookshop and Amazon web servers. We all have impacts far beyond what we do ourselves, directly.

Edit: and it's about how the writer spends that million.

Edited by huw

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Thanks. That beared me up. The bear is back. There is no way prices can stay where they are because FTBs have tasted blood. That's better. Now, I need to lay down.

I'd support the view that lower oil prices may well result in no rate rises (or cuts) and may well result in a milder recession. I'd also support the view that HPC now underway will continue... it takes ages to change the direction that is house prices... but maybe just maybe if the wider financial disaster is less extreme than predicted we may well see more of a lingering death with a longer shallower period of price drops with inflation taking more of the bruden rather than a short sharp shock with prices dropping maybe 30% in a couple of years the lonegr version might be 14%, 8%,4% and a couple of years of minor falls /bobbling along the bottom......... I think a sharper shock might be more preferable and certainly would be for everyone with a house buying or moving decision pending but if the financial picture does improve then it could feasably spread the correction.

Interesstingly I saw one report from Lehman saying oil to be at $85 next year... just goes to shows these forcasters blow in the wind.... I am as likely to be right as they are and I am sticking to my prediction of $100 or thereabouts.... two to three weeks people said I was barking and oil would take a break and then power through $150 and on to $200....... some were even saying $300 was on the horizon.. now maybe they are not feeling so sure, unless of course they know an Iran war is on the way in which case all bets are off.

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  • 399 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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