Petrol hits new high

[Martin75]

The present spike in Oil pricing is nothing to do with fuel duty, its apples and pears as usual, when this subject gets discussed.

Crude oil prices have increased as a corollary to expected sanctions by the UN against Iran, the world's third largest Oil Producer; for proceeding with alleged plans to procreate nuclear fission into weaponry.

OPEC spare oil production capacity dropped 33% in the first two months of this year compared with same period in 2011. The 12 OPEC member states had an average 2.5 million barrels a day spare capacity during January and February, down from 3.7 million b/d a year earlier. This spare capacity of 2.5 Mbd is almost exactly what Iran was exporting until late 2011 - a big gap to fill. Presently there are no plans by Opec to increase production as an offset.

Specifically, the spot price for Brent (North Sea) crude has increased $16 a barrel since January. Given that there are 42 gallons to a barrel, that works out to a 38 cent increase in the price of a gallon of oil. Spot prices for gasoline trade in New York have increased about 41 cents per gallon over the same time frame.

See graph:

[majedm75]

The problem is that Europe does not rely on Iranian crude as much as it does on the North Sea and other Middle Eastern countries. Iranian crude is mostly exported to the Far East (India, China, etc... ) who did not put any ban so far on Iran...

[Martin75]

Originally Posted by majedm75

The problem is that Europe does not rely on Iranian crude as much as it does on the North Sea and other Middle Eastern countries. Iranian crude is mostly exported to the Far East (India, China, etc... ) who did not put any ban so far on Iran...

Wherever consumption occurs in a Global market it still contributes to the total overall price, by lifting demand.

The UK currently contributes 1.78% of total world oil production, which will continue to decline, unless capital is injected.

The effects of the 'Arab Spring' may well be truly alarming for World Oil Prices over the next decade; if the Arab League and the Saudi's (jointly 40% of world production in 2011) do not offset the restrictive attitude of the Russians and others in South America, by lifting production.

Hopefully the Arabs will be more interested in protecting their significant investments in Europe, raise daily throughput, and therefore not contribute to the further stagflation of a region already stretched by self created disasters like the Euro.

[Tim_Burgess]

Originally Posted by majedm75

The problem is that Europe does not rely on Iranian crude as much as it does on the North Sea and other Middle Eastern countries. Iranian crude is mostly exported to the Far East (India, China, etc... ) who did not put any ban so far on Iran...

Good point, however, there is one global price for crude oil as I understand it, so it doesn't matter if Europe / UK take Iranian oil or not. I sure that there's an element of speculators keeping the price up here as well as "regional" factors like Iranian Sabre rattling.

I did hear on Radio 4 yesterday that the price has now fallen back again, I'm sure this will be reflected in the prices at the pumps soon. OH, gosh! A squadron of pigs just few over my house.

[Martin75]

Originally Posted by Tim_Burgess

I did hear on Radio 4 yesterday that the price has now fallen back again, I'm sure this will be reflected in the prices at the pumps soon. OH, gosh! A squadron of pigs just few over my house.

Completely agree Tim, I spent 25 years in the Oil Industry and always recall an old sage remarking

always remember Oil Companies are not in the oil business - their in the Oil shortage business ...

Also technological advances within the communication explosion has greatly increased the intervention of commodity speculaton, as returns in the capital and equity markets bump along the bottom ridge of aftershock and illusion following the banking collapse.

Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer. Adam Smith

[EDDYW]

Originally Posted by Colin_NI

Voting changes nothing, its the high powered civil servants who restrict the country who advise and shape the country truly.

Hello,
I totally agree with Colin,
The trouble is they have gold credit cards and a limitless expense account,
WE pay in full every time,
The "British"? Primeminister Is only the chief puppet who decides how to say what the "high powered" civil servants tell them to, (that,s why nothing ever changes regardless who,s in power) And they are NOT voted into office.