http://www.housepricecrash.co.uk/forum/index.php?showtopic=175389&pid=3263993&st=0entry3263993

Thought this may be of interest.

In case it wasn't clear this isn't my analysis, I am posting a link to a post made on another forum by someone else

Brent crude traded above $120 this morning (it's since fallen back slightly), and with sterling trading at 1.584 to the dollar, when priced in sterling Brent is almost £76/bbl.

The peak closing price of £77.45/bbl was hit on 8th April last year. At that time Brent reached $126.90/bbl but sterling was trading higher, at 1.639.

A drop in sterling to $1.545 or a rise in Brent to $123 will see the nominal closing record broken.

The problem here is one of persistence – is this just a temporary blip, or will this price level be sustained for some time or go even higher? After the peak in April 2011, Brent sterling fell back quite quickly and in May was below £70 once more. By August it was below £65 for a period.

If the current price persists then by the summer we'll have oil trading 10%-20% above last year, and this will have serious repercussions for the UK economy. On the one hand we may see other prices rise as a reflection of increased input costs, in which case the MPC will once again be left with egg on its face as CPI inflation rises above its predictions (although as before it will wave away the increase as "unexpected exogenous factors beyond its control"). If on the other hand firms try to absorb higher energy costs without increasing output prices then the profit squeeze will likely result in reduced investment and the shedding of many jobs.

As any committed peak oiler will tell you, declining conventional oil production doesn't necessarily lead to price spikes up to $200 or $300/bbl. Instead as the oil price rises it sends economies into recession, reducing demand for oil and easing the upward price pressure. Additionally the higher price level makes previously uneconomic oil extraction viable, and this brings in new supply albeit at a much higher producer price. The recession-hit economies begin to recover, but then a further decline in conventional crude production pushes the oil price up again and we start all over.

Irrespective of whether the above scenario has any merit, it's predictable what the response of the Bank of England will be should higher oil prices threaten once more to delay the supposed imminent 'return to normal' economic activity – they will simply print more money to "sustain demand". This in turn might well lower the value of sterling against the dollar - resulting in an even higher oil price.

Meanwhile high crude prices have left petrol and diesel prices close to a nominal record as well. Diesel may well show a new high when the DECC releases its weekly fuel price data on Tuesday (current high is 143.06 and on Wednesday according to petrolprices.com the UK average was 142.99), and petrol is at present some 1.7p/ltr below the record of 137.05 set in May 2011.

Previous post on this subject: http://www.housepricecrash.co.uk/forum/index.php?showtopic=167298&view=findpost&p=3071263

The Beeb would seem to agree with you, apparently diesel in the UK has just hit a brand new record. Time for me to ditch the PD130 for a 1.4 TSI?

Motoring organisation the AA said the cost of filling up the tank of a commercial van with an 80-litre fuel tank had risen from £90 in February 2010 to £114... Inflation for diesel is now almost double the Consumer Price Index of 3.6%.

bbc.co.uk/news/uk-17072925

Edited 17 February, 201214 yr by ckyliu

Yup, close to the point where diesel is more expensive than most petrol engines for a huge number of motorists who previously enjoyed more MPG.

I'm sure I heard the breakeven a year is now rocketing up to 20k for some common choices before a derv is more cost effective!

I was toying with a derv for the Mk3, but now I'm thinking electric!

Bring on hydrogen. :(

I was toying with a derv for the Mk3, but now I'm thinking electric!

£25k for a car with a 100 mile range?

£25k for a car with a 100 mile range?

Can count on one hand the times we do over 100 miles in a day.

Fuel will eventually run out and with current unrest prices could go too silly not to seriously consider it.

Where do you think a bulk of electricity comes from? Fossil fuels... it's just another way to ignore the inevitable.

Something new and radical is needed. Both BMW and Honda have been working on hydrogen for many years, and I think it's the way forward. No emissions, just water from the exhaust. The engines work in a similar way to petrol. They're not exactly a refined art currently, but what is when it's new?

Only problem- and it's unfortunately a big one- is containing hydrogen stably. Everyone remembers what happened to Hiroshima...

Saw diesel at 151p per litre at Frankley Services not that I would almost ever by fuel from there.

No rise in Excise Duties due until August 1st after the Autumn statement resheduling of Fuel Excise Duties.

GB pound has been holding up quite well and oil prices ie West Texas has been around $100 although Brent seems to be widening again.

I think the deals like the Tescos, and other supermarkets, 10p off etc per litre distorts the market as they make the price higher for those without vouchers and other local non supermarket stations follow the lead.

Makes choosing the next car very difficult. 1.6D DSG Octy was looking a favourite but it has the same fuel consumption as an A1 1.4 TSI, humm.

£1.56 a litre for diesel near the sullom voe oil terminal where they bring the stuff ashore

Sent from my motorola xoom using tapatalk

Diesel is £1.419 near me it's only 6p more expensive than petrol so it will have to go up a lot more before I consider going back to petrol, my last two petrols were a 1.8 octy and a 1.8 laguna, both returned 38mpg driven sensibly where as the tdi octy returns 60mpg so there would have to be at least 60-70p between them before it becomes cheaper to run a decent petrol. I think my next car will probably be a 1.6 HDi Citroen C4 which returns 70+ mpg.

Dervs account for 55% if what's on our roads according to the news, but over 70% of new sales.

Something has to give. You can't refine it on its own, so what's happening to all the rest of the raw oil?

I was watching a program made in 1995 the other day, it had a clear shot of a petrol stations price board - 55p/l.

Wonder what will happen now Iran has pulled the plug on supplying Europe?

Will it simply be a case of they sell to someone who then sells to us, or we simply see prices rocket instead? Isnt it only mostly deisel that's bought from Iran anyway? 80% of it IIRC?

Wonder what will happen now Iran has pulled the plug on supplying Europe?

Will it simply be a case of they sell to someone who then sells to us, or we simply see prices rocket instead? Isnt it only mostly deisel that's bought from Iran anyway? 80% of it IIRC?

No doubt there will be a war due to sort that out ;-)

Where do you think a bulk of electricity comes from? Fossil fuels... it's just another way to ignore the inevitable.

Something new and radical is needed. Both BMW and Honda have been working on hydrogen for many years, and I think it's the way forward. No emissions, just water from the exhaust. The engines work in a similar way to petrol. They're not exactly a refined art currently, but what is when it's new?

Only problem- and it's unfortunately a big one- is containing hydrogen stably. Everyone remembers what happened to Hiroshima...

Collect the water into a tank and use electricity generated when braking to split that water back into hyrogen and oxygen.

That or plug it in to generate the hydrogen again.

Obviously, you'd still have the option to dump that water at a fuel station and then fill up with fresh hydrogen.

Range extension rather than something that'd be fueled for life as you require too much electricity to split the hydrogen in any large quantity.

Where do you think a bulk of electricity comes from? Fossil fuels... it's just another way to ignore the inevitable.

Something new and radical is needed. Both BMW and Honda have been working on hydrogen for many years, and I think it's the way forward. No emissions, just water from the exhaust. The engines work in a similar way to petrol. They're not exactly a refined art currently, but what is when it's new?

Only problem- and it's unfortunately a big one- is containing hydrogen stably. Everyone remembers what happened to Hiroshima...

First you point out where most of our electricity comes from, then you claim hydrogen is zero emissions - how do you think you get the hydrogen - electrolysis!

Hiroshima? I think you might be confused. a. The first Hydrogen bomb was detonated in 1952. b. I assure you there is no chance of a tank of hydrogen going nuclear in your boot unless you also have an A-bomb there!

Edited 21 February, 201214 yr by Kandy

Hang on to your credit cards Iran has given them an excuse to ramp up the prices.

NB. There are other problems with hydrogen. It's very difficult to store. It's not easily liquified so has to be stored as a gas at massive pressure. Hydrogen also weakens metal storage tanks over time eventally causing leaks.

Most of the research is going towards storing hydrogen chemically rather than as free gas.

Artificial ways of making petrol might leap ahead yet. Petrol is very good at energy storage.

First you point out where most of our electricity comes from, then you claim hydrogen is zero emissions - how do you think you get the hydrogen - electrolysis!

Hiroshima? I think you might be confused. a. The first Hydrogen bomb was detonated in 1952. b. I assure you there is no chance of a tank of hydrogen going nuclear in your boot unless you also have an A-bomb there!

He's maybe talking about the airship disaster (can't remember the name, begins with H I think)

He's maybe talking about the airship disaster (can't remember the name, begins with H I think)

Think it was the Hindenburg ? - horrific.

First you point out where most of our electricity comes from, then you claim hydrogen is zero emissions - how do you think you get the hydrogen - electrolysis!

Hiroshima? I think you might be confused. a. The first Hydrogen bomb was detonated in 1952. b. I assure you there is no chance of a tank of hydrogen going nuclear in your boot unless you also have an A-bomb there!

I assume you've read NASA's bumf on hydrogen? Including the fall out zone for various quantities of stored hydrogen?IIRC a 100 litre of liquid hydrogen has a fallout of 10 miles! Imagine a filling station of the stuff; eek!

Collect the water into a tank and use electricity generated when braking to split that water back into hyrogen and oxygen.

That or plug it in to generate the hydrogen again.

Obviously, you'd still have the option to dump that water at a fuel station and then fill up with fresh hydrogen.

Range extension rather than something that'd be fueled for life as you require too much electricity to split the hydrogen in any large quantity.

You need a lot of energy to create hydrogen. So far no one has created even a small enough unit for home production, let alone on-board production!

You need a lot of energy to create hydrogen. So far no one has created even a small enough unit for home production, let alone on-board production!

Oh don't get me wrong, you'd need a huge amount of leccy and it was said firmly tongue in cheek.

Of course technology improvements may mean that one day the regenerative braking is enough to split enough hydrogen from the water created to extend range a worthwhile amount.

I assume you've read NASA's bumf on hydrogen? Including the fall out zone for various quantities of stored hydrogen?IIRC a 100 litre of liquid hydrogen has a fallout of 10 miles! Imagine a filling station of the stuff; eek!

Fall out? Are we mistaken this stuff for nuclear/radiological stuff,

Jonny Boy, you say a War is on the Horizon, Yesterday on the Radio it was predicted to start before the end of the US Administration, November was mentioned. Hold on to your Hats, as Mrs T said (nothing like a War for the Economy)

Jonny Boy, you say a War is on the Horizon, Yesterday on the Radio it was predicted to start before the end of the US Administration, November was mentioned. Hold on to your Hats, as Mrs T said (nothing like a War for the Economy)

O RLY?

There's a lot of debt to be paid back by you, by me, our children and probably our grandchildren too. Realistically the only way that is going to happen (other solutions* would be politically untenable) is if money is printed and inflation is tolerated for a prolonged period. Still might not work and even if it does it will bring a whole new suite of problems.

Whatever action is taken don't expect it to be done in your interests, do expect your standard of living to fall, do expect a simpler way of life, do expect to work even harder, do expect to own fewer posessions. You may be pleasantly surprised and if not, at least you'll be prepared.

*Well one other solution is tenable and often follows a period of severe economic strife. It will instill a sense of national pride, people will pull together, they will be happy to accept a lower standard of living and it will also provide demand stimulus in the economy. You may even have heard of this wonderful solution, its called war, usually a very big one. You've all read 1984?