Thursday, September 20, 2007

All of this, and only a tropical storm threat, not even a hurricane.

Oil hits high over $84

"Energy companies have shut over 360,100 barrels of oil per day, some 27.7 percent, of Gulf crude oil production and 16.7 percent of natural gas production on the storm threat, the U.S. Minerals Management Service said on Thursday". Bernake's talk of a positive economy has also boosted oil prices, an imediate example of inflation from the fed cut.

Posted by planning4acrash @ 10:29 PM (1251 views)
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29 thoughts on “All of this, and only a tropical storm threat, not even a hurricane.

  • I don’t get it, when oil was 77$ a barrel last summer petrol was 99.9p everywhere.

    My local Shell is still 92p.

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  • Oh and bet the CPI still drops even with oil going up and wheat prices rocketing.

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  • planning4acrash says:

    A graphic from national hurricane centre: http://www.nhc.noaa.gov/gtwo_atl.shtml

    Imagine the effect of a big hurricane ripping through from the atlantic? $90-$100 anybody? Hows about if that happens next year, 2yrs time, $120+?

    The scary thing is, that oil should be at a seasonal low now, after the driving season and before the winter cold. Buckle up!

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  • Yeah planningforccrash is right. When I was in Canada, petrol went down from 84 cents to 60 sometimes even in the 50s. That’s 30p folks. It was like clockwork straight after Labour Day in Canada.

    It’s insane, the driving season is over prices should be dropping.

    But these rises haven’t bee seen on the forecourt yet.

    BP though has put up the price of diesel by 2 -3p.

    But when Israel was bombing Lebanon it was 99.9p and then oil was 77$.

    I sense massive increases in petrol prices soon.

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  • planning4acrash says:

    Oil went up today David, it will not feed through to petrol prices today. $80 prices of the last few weeks will feed into the pump very soon, £1 petrol was on its way anyway. It will take about another yr or so for recent high oil prices to fully feed through to general CPI prices, which is why I think that CPI will start really showing strain between January and Easter.

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  • Oh I agree planningforacrash but Oil has been above $80 for quite a few days now.

    Petrol companies usually whack up prices as soon as oil rises but are very slow to bring them down.

    My local Shell is 92p for regular, eyt last year when the Israel conflict was going on it was 98p and oil back then was $77.

    Surely we should be £1.03 for petrol now and with a 2p increase in duty occuring it should go up to maybe £1.05.

    Funny the Government makes more money when oil is higher from VAT on petrol but they will also increase the duty as well.

    They are alreading making extra tax money on the VAT but they are going to increase the duty as well.

    I am lost for words. I honestly thought this week would be the start of the crash.

    But with CPI dropping to 1.8% while RPI has risen to 4.1% I am just totally lost for words.

    If this wasn’t the beginning of the end of house price inflation then I don’t know what will be.

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  • planning4acrash says:

    David, I still think that we are not in crash territory until mid to late 2008. We still don’t know the full extent of the sub-prime crisis, but each little bit of info will cause massive losses of confidence in parts of the economy (bear stearns, Northern Rock), and slowly chip away at parts of the economy in general that rely on high leverage. The powers that be will keep the info secret until they cannot hide it (look at northern rock, we only found out when they were forced to go public about needing BOE assistance) so the wait will be like chinese drip torture! I’d buy yourself a good book and take some of Sue’s advice!

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  • Planningforacrash, this is why I lose faith because last year, the crash was 1 year away and the year before etc. The next year it will be the same, ie 2009 will be an interesting year.

    The NR crisis was quite serious but the actions of this week and the apparent bullying of Merv show that the Government will not allow house prices to crash. They will bail banks out even if they screw up big time.

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  • tyrellcorporation says:

    I totally agree David, Western governments are now totally reliant on high house prices for their apparent success. They will bail out the markets by hosing our money at the problem if they need to and hide inflation with dodgy stats. My only hope is that events will overtake them and their powers will be dimished by the fact that economies are globalised like never before.

    I thought NR was the start – they snuffed out that one. They then snuffed out the 3 month lending blockage by offering cheap cash and using the lenders dodgy mortgage book as quality security! expect this malarky to go on and on and just hope they somehow don’t manage to dodge a bullet one day.

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  • Not going to happen in relaity though is it tyrell?

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  • Economies may be globalised, but when the British Government says that they will secure all savings in a British bank you gotta wonder if a crash will ever happen.

    The British Government seems determined at all costs to keep the housing price boom going and to never ever allow house prices to show any sign of a dip.

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  • If the near collapse of NR wasn’t enough to trigger a housing crash then I don’t know what else will be.

    That was the biggest shock to the financial system for a while and the panic is now well and truly over.

    This is what I mean by saying that when a bubble goes on for so long, the Government has to protect the bubble because the fall out from it would be so horrendous they cannot ever allow it to happen.

    I believe that the housing bubble has now entered that category.

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  • David,
    I agree, looks like Gordy is running to the polls before the phosphate strikes the rotating cooling system.
    As per usual, patience and a sense of humour is what is needed.
    After all, we need to keep perspective. Did you see the ITV report on Zimbabwe recently ?
    Could be a LOT worse !

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  • Zimbabwe has been screwed for years and yes I know it could be a lot worse.

    But technically out of all of the Western countries, we are in the worst position.

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  • If the £ and $ lose value massively, then my company may stop hiring zillions of new employees in Bangalore and my job may even get some element of security.
    Bring it on !!

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  • Interesting though, I would have thought that by now the Tories should be kicking Labour’s butt, but no they seem to be lagging even further behing in the polls since Brown came to power.

    As long as house prices keep rising people keep voting for Labour.

    This bubble is now so big and so much relies upon it that the Government will never allow it to pop.

    Expect pressure to drop interest rates very soon.

    I wouldn’t be surprised to see interest rates 0.5% lower before the year is out.

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  • Look at Friday’s Times.

    What is your house worth is on the front cover, says it all really.

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  • The government may not want it to pop but there are people with a lot of money who won’t want it associated with the sort of practices that are being used to artificially prop the old lady of threadneedle street and the UK up and will start to move their money out of sterling.

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  • The UK & US have a lot to offer the world in terms of technology and creativity.
    So when our currencies are devalued, a lot of the work force will benefit.
    OK, the lawyers and accountants will suffer, but all the people involved in the export industry (me included) will benefit massively.
    And workers involved in exporting tend to be in the real economy. No property porn. No cappucinos. Just being world class at what you do.

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  • Yeah, as long as we have enough energy to benefit from it, the state of our generating industry and it’s network capacity is such that I think it’s only the fact that large industrial users have been shut down over the last 15 years that has kept the lights on.

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  • Agreed, the govt has crucified the energy industry too.
    What is even more annoying are all the “skill shortage” stories in the press about how few people ar taking STEM (Scien tech, eng and maths) course and what a tragedy it is.
    Easy solution .. pay us as much as you pay the financial whizzes buying and selling the businesses (or more even).
    I have been engaging the IET (www.theiet.org) on this !!

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  • Back to the original article and early comments: oil is above $80 but petrol is still cheap because the dollar has lost a lot of value. Today’s $80 barrel costs £40, last year a $65 barrel cost £40 too. Hence no change. If the pound starts to sink because of Swervin’ Mervin’s actions, oil will shoot up and so will inflation.

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  • I believe David20040_0 is probably right. One factor which has not yet been discussed on these pages is the ability of a Government to rule. Gordon Brown is no fool and will bring whatever pressure he needs to pressurize the financial world to prop up the financial system and house prices. A loss of either would result in his political downfall.

    But you can only manipulate the markets for so long ….

    Perhaps a run of the Pound will occur.

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  • I have all the oil…

    Its just nobody wants to come here to extract it.

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  • 2008 may be the more interesting year, but the bubble is already deflating down here in the south east – sales are stagnating, agents windows are half empty (anyone else noticed how most houses now get an A3 sized ad in the window when it used to be A4?), and asking prices are falling. Even with propertysnake tied up, it’s plain to see. They may be calling them ‘repricing’ at the moment as ‘reduced’ is a word they’ve forgotten how to spell, but the direction is clear.

    Crash is a term to apply afterwards, while you’re in one it doesn’t look as rapid as you might think. Even the dotcom crash was slow for many of us as no one believed that share pricess would keep winding down…

    Hurricanes, oil, NR, credit crunches, A&L adding 0.2% to their mortgage rate today without a base rate rise….this is only going one way, even government intervention can only slow the pace so that the wider impact is only apparent after an election.

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  • If governments had the power to avoid housing crashes forever, why did they not do so in the USA? Or do you all just actually believe that Gordon is really a God? I don’t understand why you have so much faith in our Government’s abilities, I really don’t. You slag them off as useless in every other regard, but when it comes to manipulating an economy they are apparently supermen! What?! There is only so long that this sort of binging on debt can continue, and I base that statement on maths and not crystal balls, so suggesting that any Government can sustain it indefinitely is like believing King Kanute. Of course they don’t WANT an economic down-turn, but think of how many economic down turns there have been in this world – do you think any of the Government’s that presided over them actually WANTED it to happen? So would they have let it happen if they could have stopped it? Look at Zimbabwe – Mr Mugabe controls absolutely everything that it’s posible to control in that country with an absolute fist of iron and yet even he can’t stop their economy going down the toilet. Bernake has cut rates and it’s already hitting the dollar and the price of oil and everyone’s saying it’s going to make the economy worse not better, but then you guys think the UK Government will just take exactly the same action but magically it will work like here in the UK just because Gordo wants it to!

    Sorry, got wound up there. Must stop ranting.

    Planning4…”David, I still think that we are not in crash territory until mid to late 2008.” It depends what you mean by “in crash territory” – do you mean the crash won’t start until then, or won’t be in full swing until then? I believe that it has started already – the figures for less mortgages being taken out, prices dropping, repossessions increasing, lending criteria tightening, mortgage rates going up even without the BoE changing the Base Rate – I don’t think these things are just blips, I reckon the genie is now finally out of the bottle and the little so-and-so isn’t go back in without a fight this time around. Obviously I could be wrong, but my belief is pretty firm right now.

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  • I think the government will do all in it’s power to prevent a houseprice crash it will also try to prevent petrol going over £1.00 a litre. It’s knows that most people gage inflation by the price of petrol, we all know what happened the last time there was a ramp in petrol price the country nearly fell apart under fuel protests. Eventually the government will fail on both counts I think we all give the government far to much credit in controlling things the fact is it’s losing control rapidly.

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