Libyan crisis, rising oil price, and over-due realism

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Libyan crisis, rising oil price, and over-due realism
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cab

Joined: 01 Nov 2004
Posts: 32429

Posted: Mon Mar 07, 11 11:39 pm Post subject:
Only 12%? Thats a surprising perspective. Its a big price hike. And it'll get bigger if crises develop in other middle Eastern oil producing states like, say, Saudi Arabia. And its a taste of things to come.

dpack

Joined: 02 Jul 2005
Posts: 45472
Location: yes

Posted: Tue Mar 08, 11 12:27 am Post subject:
never mind extinctions appen

Shane

Joined: 31 Oct 2005
Posts: 3467
Location: Doha. Is hot.

Posted: Tue Mar 08, 11 4:28 am Post subject:

cab wrote:

And it'll get bigger if crises develop in other middle Eastern oil producing states like, say, Saudi Arabia.

Spot on. At the moment, global supply shortages can be mitigated against by turning up the taps elsewhere in Opec, with Saudi being by far the easiest source of an almost-instantaneous increase. If Saudi was unable to ramp up production on whim, then you'd see a real increase in the price.

Don't forget that Libya only really has oil going for it. The current crisis will be resolved, one way or the other, and production will stabilise, so the longer-term effect on the oil price will be insignificant. The markets will also be factoring in that if Gadaffi is deposed it will become easier to access the Libyan oil as sanctions are likely to be lifted (depending on who takes over, of course, but the international community will make efforts to get the new rulers onside).

On a secondary note, it's going to be interesting to see what happens in a few decades when countries that have got stupidly rich off the back of oil have to come to terms with their only exportable asset running out.

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Tue Mar 08, 11 8:06 am Post subject:

cab wrote:

Only 12%? Thats a surprising perspective. Its a big price hike. And it'll get bigger if crises develop in other middle Eastern oil producing states like, say, Saudi Arabia.

Yes, and the oil price is much less than it has been. Of course if other countries like Saudi Arabia stop producing we're in deep trouble but I can't see us doing much about that in the short term when it's likely to happen. I certainly won't be worrying about dropping the speed limit.

cab

Joined: 01 Nov 2004
Posts: 32429

Posted: Tue Mar 08, 11 8:22 am Post subject:

Treacodactyl wrote:

Its not the highest oil price ever, but its getting there:

https://en.wikipedia.org/wiki/Price_of_petroleum

The point of posting this thread is that whether we like it or not, oil prices are rising, and because of that (something that has been entirely predictable for a very long time) our government is only just now looking to try to make a plan. Should this be something that we as a nation have a strategic plan for, or not?

cab

Joined: 01 Nov 2004
Posts: 32429

Posted: Tue Mar 08, 11 8:40 am Post subject:
Spain cuts speed limits to save fuel costs: https://www.guardian.co.uk/business/2011/mar/07/spain-lowers-motorway-speed-limit-save-oil

Shane

Joined: 31 Oct 2005
Posts: 3467
Location: Doha. Is hot.

Posted: Tue Mar 08, 11 8:42 am Post subject:
Won't make any difference in Spain, cos people only drive at one of two speeds - 20 kph or twice the speed limit

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Tue Mar 08, 11 8:43 am Post subject:
You could argue the current government is doing something. By not cutting fuel taxes, at least by as much as Labour want, they are keeping the costs of motoring high which may lead to people reducing their mileage. There also seems to be a fair bit of new exploration and extraction from shale and tar sands which will only be encouraged if you concentrate on oil prices.

Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Tue Mar 08, 11 9:07 am Post subject:

The Government (any flavour, any colour) won't do a lot, because it's political suicide to do so. The whole system has a major flaw, like any other system. What we need is a bunch of despotic, power crazed dictators, running the army, who can't be got rid of, to make long term, unpopular policies for our own good, who bleed green.

Not likely to happen, really. I'm afraid I'm with dpack; and enjoy it while you can.

cab

Joined: 01 Nov 2004
Posts: 32429

Posted: Tue Mar 08, 11 9:24 am Post subject:

Treacodactyl wrote:

You could argue the current government is doing something. By not cutting fuel taxes, at least by as much as Labour want, they are keeping the costs of motoring high which may lead to people reducing their mileage.

There also seems to be a fair bit of new exploration and extraction from shale and tar sands which will only be encouraged if you concentrate on oil prices.

The argument is not that oil prices are too high! The argument is that high oil prices are the inevitable result of dwindling oil reserves in a global market that is thirsty for ever more oil. That is unavoidable. Not reducing fuel taxes as much as someone else would isn't a strategic plan, its faffing about a bit at the edge.

Some people here have posted suggestions for other things that could and probably should form part of a more coherent strategic plan for handling this problem. What do you think?

cab

Joined: 01 Nov 2004
Posts: 32429

Posted: Tue Mar 08, 11 9:26 am Post subject:

Nick wrote:

The Government (any flavour, any colour) won't do a lot, because it's political suicide to do so.

Mass unemployment, huge inflation and econopmic stagnation are the inevitable result of not planning around this problem. Thats political suicide written as large as you can get.

Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Tue Mar 08, 11 9:28 am Post subject:

cab wrote:

Nick wrote:

The Government (any flavour, any colour) won't do a lot, because it's political suicide to do so.

Mass unemployment, huge inflation and econopmic stagnation are the inevitable result of not planning around this problem. Thats political suicide written as large as you can get.

That's not about to happen in this Parliament as a result of their policy on oil/energy use tho. It may happen, I grant you, but policies you wish to see won't be considered by any government whilst they are electable for a mere 4/5 years.

cab

Joined: 01 Nov 2004
Posts: 32429

Posted: Tue Mar 08, 11 9:40 am Post subject:

Nick wrote:

Yet they are, finally, looking (allbeit in an ineffective, half-ar£8d way) for contingency plans. Not in this parliament? Wait to see what happens if Saudi protestors really kick up a fuss.

Behemoth

Joined: 01 Dec 2004
Posts: 19023
Location: Leeds

Posted: Tue Mar 08, 11 9:53 am Post subject:
It's all labour's fault and the defecit, isn't it?

Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Tue Mar 08, 11 9:55 am Post subject:
I'm just waiting til the budget when they make fuel cheaper. Then we'll be able to heat our homes with the excess hot air that will ensue.

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