ANOTHER SHOT TO DISPEL GLOOM AND DOOM, PORTHCURNO FROM THE MINACK AT ST LEVAN TOWARDS LOGAN ROCK AND TRERYN CASTLE, THE SOUTH WEST BOUNDARY OF CONSOLS TERRITORY, AREN’T WE LUCKY PEOPLE AT ST DAY?
Back in those horrendous dog days of midsummer factors driving the oil price spike would actually have been much worse in the UK than they were had the pound at that point not been worth $2.12cents.
Currently the pound is only worth around $1.55 cents which is a seriously limiting factor to greater oil price reductions in the UK. Were the pound still at the midsummer exchange rate fuel prices in the UK would currently be considerably lower than they presently are.
As was repeatedly stated at the time the historically weak dollar helped fuel the speculative rush into oil as a hedge against inflation, actuallly, in the process, driving the dollar ever lower to the historic point where something had to give. The result was equivalent to lancing a boil as the pent up finacial tensions spattered randomly over an ill prepared financial sector who seemed to be under the false illusion that they were in full control of unfolding events.
Who was that handbag weilding “Old Biddy” who once famously stated that “you cannot buck the market?”.
In this instance the by now very out of control ”Masters of the Uiverse” failed to appreciate the lethal potential of a rapidly unravelling sequence of seemingly unrelated events right up to the very moment when the thing went pop in their collective faces. Actually they were only marginally less in control than the stunned Politico’s who turned a whiter shade of pale as the financial house of cards imploded spectacularly vaporising sqillions of pounds and dollars of taxpayers funds in the process.
“WELL SHE WAS CERTAINLY RIGHT IN THE END ON THAT ONE.”
UK Prime Minister Gordon Brown meanwhile convieniently chooses to ignore this unpalatable fact of economic life as he continues to stir the pot with regard to fuel prices. It is felt that his main thrust in this direction is to engineer the fuel price as low as possible in order to re-implement the previously postponed 2ppl fuel duty hike at a time when it will be less noticeable to consumers. Perhaps with this in mind its just as well the pound is weak against the dollar as God alone knows what he might get up to on the fuel duty front were it otherwise.
Another inescapable fact is that OPEC currently appear to have lost their grip on oil prices as their latest production cut of circa 1.5 million barrels per day is shrugged aside by the still falling market, due to the unprecedented crash in worldwide demand for oil. Latest US figures reveal a 7% fall in demand, the greatest drop in over 60 years as millions of Americans make hitherto unthinkable alterations to their driving habits.
OPEC fears of falling prices strangling investment in new production development convieniently ignore the fact that todays albeit much lower oil price is still higher than it was before the start of the speculative bubble and the massive profits windfall it created for OPEC Members.
It appears that wherever one looks financial managers are losing the plot with regard to the true situation rather than the climate of fantasy which they have collectively been focussed on during the last year. Whatever happens, in reality life will continue in some form or another, we are merely facing an as yet indeterminate period of lower demand, not a complete permanent total shutdown as some doomongers seem to be forecasting.
Consumers also ought to appreciate that whilst the last year has inflicted grievous harm on the economy the end result of current turmoil will eventually be greater stability as a result of tighter controls on the availability of credit and a refreshing but long overdue dose of sanity in the property sector.
In reality the majority of UK domestic oil customers avoided the very worst of the oil price crisis as it peaked at a time of traditionally low demand. The minority who took the view that things would continue to worsen made the wrong decision, often against advice from their supplier, while unfortunate thats life, there will always be winners and losers.
Oil is rapidly regaining its former position as a highly competitive, convienient means of heating our homes particularly in rural areas like Cornwall where gas mains are thin on the ground. It continues to offer true choice and value from a variety of established suppliers who keep each other on their toes in the endless quest for market share.
TRULY FREE AND FAIR COMPETITION CAN ONLY BE GOOD FOR EVERYONE, TAKE NOTE GORDON!!! THE FUEL DISTRIBUTION TRADE IS DOING ITS BIT, YOU DO YOURS.
Brent crude is currently $58.93 down another $0.38 from $59.31 earlier.
