Oil price rises - temporary or not?
Paris based IEA (International Energy Administration) declared last week that "There's nothing much getting in the way" (of oil price rises)
The Oil Depletion Advisory Centre advises that : -
"Although the (Scottish) strike is only set for Sunday and Monday, management had already ordered a shutdown on safety grounds, and this has forced the closure of the Forties Pipeline System which lands 700,000 barrels per day. This in turn could halt production at up to 70 North Sea platforms, affecting not just oil but also gas. Meanwhile it could take up to a month to return the refinery to full capacity."
This in no way reflects government announcements, though this is not surprising since it has no option but to strive for calm. It does however reinforce the view that government pronouncements are seldom to be believed. Few ordinary citizens in the UK will be aware of the serverity and far reaching effects of the two day strike.
This is further proof, if any were needed, of the incredible sensitivity of the global oil situation. One change of company ownership, driven by private equity; a greedier view of short term profit leading to the attempted sequestration of the workers' pension fund, and the impact on the country is out of proportion to that which we might have expected.
Saudi Arabia has just announced that it will not be increasing production, supposedly to keep back oil for future generations. Oil sceptics feel the real reason is that the kingdom simply cannot increase production, having lied for decades about the size of its reserves. Another government who's pronouncements are questionable.
All in all, it looks as though if you have any sense, you'll be thinking about how you will manage with either hugely expensive oil, or perhaps even rationed oil. The only real question appears to be "when?" If that is right, then what's wrong with now?
Bob Valentine Trueman
