Hi good old Soviet here,

I was listening to a radio programme on the way to work during this week, which was examining why oil is soaring so very much in price, and for a change it was not blaming strikes in the Nigerian oil fields, or OPEC cutting output, but came out with something totally new.

The programme was saying that international hedge fund/commodity traders had started cashing in when the price started to rise to legitimate reasons, but had now got hooked on making a killing, like one does a drug.

Unscrupulous international speculation is driving the price higher and higher, and now has precious little to do with the supply and demand situation. Of course because of these greedy capitalist sharks, we will all end up with higher fuel bills, and power bills, and food bills.

It was a very interesting programme, that looked at things from the different angle, and I wonder if any other Briskolians where listening to this one. I think that maybe my radio was tuned to BBC radio 4 at this time.

Soviet(at the sharp end)

I've seen several things cited for the high price of oil:

Commodity Speculation (Hedge funds etc)

Devaluation of the Dollar

Current supply and demand issues

Peak Oil

Its such a mess at the moment I don't think many can tell what the real reason is.

As to the involvement of the bankers, having ****ed up the global credit markets they've turned to commodities, metals, oil and food etc. Just be glad we're not poor and having to riot over food prices a la Thailand and South America.

I've seen several things cited for the high price of oil:

Commodity Speculation (Hedge funds etc)

Devaluation of the Dollar

Current supply and demand issues

Peak Oil

Its such a mess at the moment I don't think many can tell what the real reason is.

As to the involvement of the bankers, having ****ed up the global credit markets they've turned to commodities, metals, oil and food etc. Just be glad we're not poor and having to riot over food prices a la Thailand and South America.

I personally think it's a combination of the top three. Increased demand from India and China is cauing the price to go up, plus with the dollar being weak, futures traders/hedge funds/etc can get more for their money so buy more oil as well, causing the price to go up even more.

when money markets go tits up the bankers always fall back on commodities as their rates/prices are more stable than currency fluctuations.

another probelm that will be coming up is that the big ships that at the moment run on heavy oil are being told to run instead a suitable diesel mix to lower their emissions, so the price of diesel could be going up even more than petrol in the near future as the demand from ships increases.

I've seen several things cited for the high price of oil:

Commodity Speculation (Hedge funds etc)

Devaluation of the Dollar

Current supply and demand issues

Peak Oil

Its such a mess at the moment I don't think many can tell what the real reason is.

As to the involvement of the bankers, having ****ed up the global credit markets they've turned to commodities, metals, oil and food etc. Just be glad we're not poor and having to riot over food prices a la Thailand and South America.

Hi Daiking,

I suppose that most of us are in the dark as to the real cause, but on this programme a major fancier who purportedly knew his subject, was being interviewed, and his opinion was clear, that many people in the know are getting very rich at the expense of the masses.

yes you are right that things are really in a mess, but as you say we need to be thankful that we do not have food shortages, but there is always the first time for everything.

Interesting

Soviet:rolleyes:

so what you're saying is, as with the rest of the world's ills, it's down to the evil machine we call capitalism? shocking...

A weak dollar increases the price of oil in $'s but since the £ is (or was) much stronger it should have little effect.

I have no doubt that commodity traders are making a fortune at the moment but their activities are largely disguised to you or I by the other factors that may or may not turn out to be significant. It would need a large reduction in demand (i.e. global recession) to be able to see the wood for the trees. The worrying thing is that typically commodity cycles run in 10s of years and this one still pretty young, 10 years ago oil dipped to $10 a barrel. There may yet be years of price rises ahead of us.

$200 a barrel should make it about £1.50 per litre for petrol (more for diesel). If the pound reaches its recent level against the dollar (less than $1.80) then it'll be even more. I recently started a thread about the price of petrol and I said I didn't see oil hitting $200. Well, Its looking a bit different now and if it does, I would expect that sort of increase to be largely driven by speculation. We can only hope that the current peak is driven by the era of cheap credit and this will soon shake itself out.

We talk about dollar weakness but we should be more concerned about the weakness of our own currency over the past 12 months. Your house has already lost 15-20% of its value over the past year in our 'global economy' even if the pounds sterling price has remained the same. Lowering interest rates which is what the 'meedja' is yelling for would further exacerbate the problem. Anyone been on a typical package holiday yet this year? How did you find it abroad when you convert local prices to pounds. Normal? Pricey or How ****ing much? I'm not looking forward to my trip to Greece this year which was never cheap in the first place.

As to capitalism, if you would like to defend the practice of speculating on foodstuffs and fuel, hitting the world's poor the most, then I think capitalsim is broken. These are not people who risk their capital to extract natural resources from the ground, these are not people who employ workers to make thing and create wealth on a local or national scale, these are not even shareholders who put up capital that allow companies to invest, these are people who use complex financial instruments often with borrowed money to skim profits from the productive economy. If you or I went to the casino we would at least have the integrity to gamble withour own money, not someone else's pension fund or investment pot. These people are parasites of the highest order.

The world is far from perfect, with workers and the environment exploited in the name of capitalism but even these indefensible practices allow locals the potential to improve. Bidding up the price of food so that these people starve and wasting a years supply of food to make a weeks supply of gasoline is imho several orders of magnitude worse.

Perhaps at this point we ought to arrange a GB in OriginOil shares, then?

so what you're saying is, as with the rest of the world's ills, it's down to the evil machine we call capitalism? shocking...

Not really Andypoos as I am non political, just saying what was stated in the programme.

Soviet:thumbup:

My Mrs's dad works for shell and he seems to think it wont be long until oil is at £200 a barrel!! Not good. Prices are only going to go up and up, nothing we can do about it.

It will get to the point where people wont be using their cars as much, if its cold in your house you put a jumper on and not the heating!

My Mrs's dad works for shell and he seems to think it wont be long until oil is at £200 a barrel!! Not good. Prices are only going to go up and up, nothing we can do about it.

It will get to the point where people wont be using their cars as much, if its cold in your house you put a jumper on and not the heating!

Hi John,

Unfortunately oil is the one thing that effects all essentials, food goods, services, power, heating.

what ever the cause, the knock on effects are not nice, and could cause some form of unrest in various countries. Our own fuel protesters lobby may see much more support for their cause. All this is very bad.

Soviet:rolleyes:

My Mrs's dad works for shell and he seems to think it wont be long until oil is at £200 a barrel!!

I think that should be $200 a barrel, £200 a barrel would be nearly $400 a barrel :eek:

One reason not mentioned previously is that OPEC has not been increasing production to meet world demand. If they upped production, oil prices could return to a more normal long term price (around $50 a barrel) with ease.

I remember reading somewhere that known oil reserves are at the heighest all time level, so although consumption has increased significantly (and will probably continue to do so), we're not about to run dry anytime soon

its one thing people dont realise when they see the truckers protest about fuel prices is the knock on effect on everything else including your groceries. if the government knocked off 10p a litre (which they can afford to do) it would help a fair bit, especially with the extra they have added to fuel stamp duty too.

But then look at it this way how cheap the fuel would be if prices started to plummet back down to the days of $30 a barrel (if only)!!

thing is, whilst we're payign £1.46/litre - the question really has to be, it's 2008 why are we still using oil in cars? For the past 100 years plus, the combustion engine has been improved, fair enough, but why haven't we moved on? As a kid all those years ago, I expected to be in hover cars and taking trips to moon by 2000 - such a terrible shame - we're stuck in the dark ages still!

I remember reading somewhere that known oil reserves are at the heighest all time level, so although consumption has increased significantly (and will probably continue to do so), we're not about to run dry anytime soon

That doesn't mean that the price will come down just that previously unviable oil fields have now become viable.

thing is, whilst we're payign £1.46/litre - the question really has to be, it's 2008 why are we still using oil in cars? For the past 100 years plus, the combustion engine has been improved, fair enough, but why haven't we moved on?

Oil has been relatively cheap compared to alternatives so there has never been much of an incentive to research anything new.

Hopefully the high prices will 'fuel' (no pun intended) research into things like offshore bio-oil, bio-ethanol algae plants, super-capacitors etc etc.

We could switch to ethanol quite quickly but you'll pay a lot more for food and a lot of the 3rd world will starve. That is already a problem with the little amount of biofuels we use now.

Short to mid term we'll just have to pay big for oil and gas.