Saturday, 7 June 2008

New oil records

In case you hadn't noticed, this week's been eventful in the oil world... On Thursday the price had slipped below $122/barrel at one point, yet on Friday at went above $139, before settling at $138.54 at close of trading!

The rise on Friday was the largest one day rise in history. Now, people will tell you that it all happened because the dollar fell against other currencies. This is part of it, but there are two important things:

  • The dollar fell by a couple of percent at most, while oil went up more than 10% in 2 days, so there's clearly more to it than that.
  • For those of us in the UK, there's no respite, because the exchange rate between the dollar and pound hasn't shifted much from where it was a week ago, so the price of oil in UK £ is higher than ever.
So expect more price rises for petrol and diesel, and also for food, and anything that gets moved by road - oh, that's almost everything, isn't it....?

So why's the price going up like this? Simple, demand is rising, but global supply has been flat for three years now. That's the good news though - the bad news is it will start declining soon, and then we'll really see some price rises!

To read more about why it's happening, check out:


tallandrew said...

So what should we do about it then Mike?

Mike Pepler said...

Hmmm, lets see....

- change how you do things so that you don't need a car to get to work/shops/etc.
- get a bike
- buy local food and do what you can to build up a network of local food production, including growing some of your own
- make sure your house is fully insulated to a high standard
- get out of debt (including mortgages)
- keep a stock at home of enough food and water for a few weeks

I could go on...


Fr. Peter Doodes said...

Interesting, factual and full of points that are conveniently ignored by a society that has got where it has by trashing the earth and screwing the poor...

I wonder how many Christians, in addition to saying grace at mealtime, say 'thanks' when filling up their central heating tank or car.

Mike Pepler said...

I imagine very few give thanks for their fuel, but they really should, especially as a percentage of it is made from food these days...