Thursday, February 15, 2007

High Prices here to stay

Analysts predict oil price plunge to $30

The headline says it all really. With oil prices falling like an apple from a tree, where is the inflationary pressure? Looks like Merv holding his nerve has got it just right. We'll be lucky to see IR above 5.5%, and it will be back to 4% within a year. Reckon it will just be hard luck for us guys who don't own, the generation that missed out.

Posted by miniftse @ 01:35 PM (498 views)
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27 thoughts on “High Prices here to stay

  • Oil will not be anywhere near $30 in 5 years time – guaranteed. This is short term volatility. All it does is delay the inevitable

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  • There is a rather succint phrase for what the author is writing: “weapons grade bulls**t”.

    A war about to kick off in Iran, the US/UK/AUS alliance villified the world over and likely to be cut off from oil supplies. $30 a barrel. In your dreams pal.

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  • Why would it be back to 4%????

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  • I have to say I agree. Oil supply seems unlikely to increase, and demand seems very likely to. That means prices go up.

    Does anyone have access to the full text of this article, or one similar?

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  • Sorry, that should’ve been “demand seems very likely to increase”.

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  • Incidentally, if you look up the oil futures prices for this time next year, it’s $64 a barrel. That’s the market as a whole, not just one persons opinion.

    Also, with Iran building nuclear weapons, oil suppies decreasing and prices set by OPEC, do we really see a halving in oil prices in a year?

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  • You can take ‘analyst’s predictions’ with a pinch of salt at the best of times, and when it comes to predictions about the oil price, well they are laughable. Remember the Economist predicting perpetual $10 oil in the late 1990s? Remember all the City oil analysts being so certain it wouldn’t rise over $30 a few years ago, ‘Just wait until Bush sorts out Iraq and all the Western Oil giants come flooding in’ they said with supreme confidence, and look how that has turned out…Seriously they don’t have a clue.

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  • While I can see a drop below $50 being possible I don’t think we’ll get down to $30 ever again. A few things need to happen;

    Mainly India and China need to stop developing and the US need to hand back their SUVs for more fuel savvy models (which are probably not made in America).

    After that OPEC need to engineer production to bring down the price. This I don’t think they’ll do. They’re a cartel for f**ks sake.

    Finally, the article is from Canada. — Most people don’t know this; Canada is the world’s richest oil country. The problem is that the oil is underground mixed with more impurities that the stuff in the Middle East. – Ergo it’s costlier to refine so it’s only due to the recent price increases that Canada now has become a feasible oil country.

    Price drop in oil means digging for oil in Canada becomes un-economical.

    Oh, another random article.

    http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjczN2Y3dnFlZUVFeXk3MDImZmdiZWw3Zjd2cWVlRUV5eTcwNjkwMTEmeXJpcnk3ZjcxN2Y3dnFlZUVFeXkx

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  • This article is a load of rubbish. I don’t know if anyone else has noticed, but if you ever see a newspaper article on any subject you know something about, it is invariably a load of codswallop.

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  • Made me laugh. Apparently if they stop taking oil out of the ground that wont help. Apparently it is effectively just using underground storage. Blinder.

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  • Absolute drivel,

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  • Oil has been heavily overpriced for a while now. It is very likely it could go back to $30.

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  • Minifste,
    I’m 40 years old and I own a house too small for my big family, I’m not prepared to mortgage myself to stupid levels and I’ll stay where I am.
    You mentioned the word ‘generation’ so I feel I’m allowed to make a few reflections:
    Your generation mourned Princess Di’s death more than mother Theresa’s. Your generation like no other before you is obsessed with looking goood and being ‘cool’. your generation’s rock lyrics are all about lost love and identity crisis. Your generation( and by this I don’t mean you in particular) are the sons and daughters of thacher’s and New Labours individualism.
    Your Generation do not scare governments. They know they’ve tamed you and your collective thought have no clout.
    Wake up for godness sake and lift your intellect above Chelsea, Arsenal and poor Robbie Williams woes. I wish my kids can grow up feeling rebellious, and sticking two figers up to me and trhe system. It’s called the law of evolution.

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  • Bring back the Clash, Skids and Undertones as well as UB40, Madness and Stiff Little Fingers. Independant record labels, kids that dressed as individuals and quite often made and adapted clothes from army surplus and charity shops rather than buying ‘branded labels’. Most people born after 1968 are just media sheep without the memories of such stirring events as the suez crisis, three day week, power cuts, petrol rationing, miners strike and the Brixton and Toxteth riots.

    Over 40 myself and like Magnifico I’m stuck in a house that is far to small for a family of five, had the endowment, swapped it for a repayment and am now mortgaged till I’m 65.

    The biggest improvement people could make in this country is to NEVER VOTE THE SAME GOVERNMENT IN TWICE as this will prevent them from doing too much damage.

    On the subject of Oil dropping to $30 a barrell, someone in the Middle East will start a war rather than see that.

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  • Magnifico wtf are you talking about our generation being tamed by the government. What is your evidence for this? The hippy movement can hardly be counted as rebellion. If it is then I would argue there are more people getting high today than in your time.

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  • Bosh and Tollocks. Every day the sabre rattling from Israel, oops I mean America, over Iran gets more bellicose. And with the way the fed is printing money, in 5 years’ time $30 won’t buy you a pot to p*ss in, let alone a barrel of oil.

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  • Please could some one explain a fact to me, and probably miniftse as well.

    Oil used to be about $20 per barrel and then rocketed to just shy of $70 dollars per barrel, or thereabouts. But inflation did not rise astronomically. So why should falling oil lead to astronomically lower inflation then?

    Yours, most confused,

    talking rot

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  • Oh i do like to rock the boat 😉

    Yes the article did look less than professional but the point is the same, oil is down $30 from six months ago, which is significant, and will help to keep IR low. It could go up, it could go down, who really knows? Sure for every one barrel we get out the ground, we use two, but tony looks quite keen on building us some nuclear plants so who really knows?

    I do take issue with your comments magnifico, and i really don’t see your point. Prince Dianas death? WTF? More over, which generation was responsible for manipulating us (teanagers) via the media? Thatchers Children? Which generation elected and tolerated her? Oh and if we stick our fingers up at ‘your generation’, when we go for a job interview you google us and read of our protesting, ask us why we haven’t been employed for this or that period, force us to sign away our rights (37 hour week), and unless we’re going to tow the corporate line 100%, dont employ us – thats your generation who stops people from working for having beliefs. Your generation sack people for forming trade unions. We do protest, but nobody cares.

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  • talking rot –

    it takes time for it to feed through the system, for the cost to be passed on. When these costs do feed through, if the oil price has subsequently fell, pay rises aren’t granted (e.g. recent government pay deals). Also the bank has held its nerve by not being more agressive with hikes (c.f. america) sooner, the last couple of months suggest the bet has paid off.

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  • waitingfor hpc says:

    absolute bull****! miniftse

    oil has gone up 50% with no real impact on CPI at all…. yet my prices from my suppliers are up 25/30%???????????????

    This is a fudge and i have been making the same point as talking rot before. There is no no way that a minute drop in oil that still leaves it way higher than 12 months ago should have a dramatic effect. None of my suppliers have reduced their prices!!!

    Labour manipulation and it will end in tears.

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  • The Oil costs were highlighted in 2004 by BBC = http://news.bbc.co.uk/1/hi/business/3708951.stm

    This is when it shot to a 21 year high of just over $50 a barrel – oh scary!!!

    Currently Oil is is still over $55 – down from a high of over $75 – but for how long??

    As for the industry – oil can only get more expensive:

    “Oil market data is generally a black art like using a set of chicken bones,” says Paul Horsnell of Barclays Capital. “If Columbus had thought he’d hit India when in fact he was in the Caribbean, that’s about the level of oil market data.”

    Oil is running out – and the issue of Phantom Reserves will push oil higher:

    From = How Much Oil Do We Have? http://news.bbc.co.uk/1/hi/business/4681935.stm

    “One of the main reasons is that in the 1980s OPEC decided to switch to a quota production system based on the size of reserves.

    The larger the reserves a country said it had the more it could pump.

    The more it could pump the more money it could make.

    As a result in 1985 Kuwait revised its reserve estimates by 50% overnight.

    It was soon followed by United Arab Emirates, Iran, and Iraq. In 1988 Saudi Arabia became the last to join the revised reserve estimates party, adding a whopping 88bn barrels.”

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  • magnifico, enuii – nice one. blame us but don’t rebel yourselves? Its your generation that is in charge, that has the power really…

    I agree with your sentiment, but assigning the responsibilities of civil protest at the feet of people in their twenties is a cop out.

    The young do have agression; just look at yobs, youth gangs etc. Problem is they are dumb. Don’t know what to fight for.

    As for minifse: “We do protest, but nobody cares.” Where is your balls? Let me ask permission while I’m at it?

    Civil unrest is about making people listen. None of this ‘its the 40 year olds who give us jobs’ crap.

    There is definately something wrong:

    Blair lied to us about Iraq.
    Cash for peerages.
    Power crisis
    Transportation crisis
    Patricia Hewett still has a job

    I could go on….

    In fact I will

    Overcrowded prisons
    Corrupt cops
    Runaway housing market
    relaxed lending practices
    runaway debt
    uncontrolled immigration
    too many people on public benefits
    pension crisis

    If the young have the agression, but not the sense, perhaps the old should get out of their nice cozy suburban lifestyles and show us how its done? Or perhaps deep down, they are happy with the status quo?

    Or perhaps, the newspapers have ‘cried wolf’ for us too many times, and we all just cease to listen….

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  • C'mon Correction says:

    Again David – you state oil will go back to $30 a barrel ??? Reason is……

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  • C'mon Correction says:

    I think oil will AVERAGE around at least $50 over the next 5 years (probably even more) mainly due to huge demand from USA, Europe, Japan and now India, China, South America. OPEC are keen to shore prices to maintain at this level, so I will state here that I will eat my hat if we ever see oil at $30 again.

    A simple way of looking at it, is this – Oil will cost approx double over the next 10 ten years as it has from the last ten years. Add to that asset prices being more than double next ten years than last and it’s fair to say inflation pressure will be at least twice as high and thus interest rates will sit much higher also – WORLDWIDE (ie. out of the full control of BOE and Nu Labour). Average UK interest rate over next 5-10 years of 7-8% anyone ? I wouldn’t bet against it !!!!

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  • Miniftse, chilli, yes I may have gone a bit far, but don’t you agree that the youngs today seem apathetic towards big issues. I remember talking late into the night about philosophy, sociology and poetry. Nowadays I suppose I would be called a poof. I’m not talking about all of you. You two are engaged in conversation and show some fire and there are many of you, unfortunately a minority though.

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