Jump to content
UKV - The Place for Precision Rifle Enthusiasts
Sign in to follow this  
Mauser3006

Plummeting Price of Fuel

Recommended Posts

I just filled up my tank with heating oil for 32.9p/L + 5% vat. Long may it continue! :lol:

Share this post


Link to post
Share on other sites

Running a motor that does 25 mpg if I'm lucky ,,,,,long may the price continue to decrease :D

Share this post


Link to post
Share on other sites

Is the price dropping due to Isis being in control of so much oil? Whatever it's great for us.

Share this post


Link to post
Share on other sites

Mark,

 

No not ISIS related but more market manipulation both buy investment market for gain and Saudi's to excert pressure on Iran, Russia and a few others who need high $/barrel price to make ends meet and some of the same countries who the in the other side of the fence in regional politics/religion/conflicts.

 

Also in previous dips countires like US & UK simply printed money - this time all the countires are effectivly broke, nothing left in the piggy bank :(

 

Low for rest of year, lots of the pain oil companies are feeling will continue to trickle out into support industries, more lay offs and cost cutting.

 

The cries of fracking being a saviour is a joke!

 

Next year will be interesting World wide, will probably make the sub prime panic look insignificant as cost of oil production is more than value of the product = disaster. (also applicable to other commodities)

 

T

Share this post


Link to post
Share on other sites

Here is a breakdown when petriol was 134p litre and Brent Crude was $107 a barrel:

 

Fuel Duty 58p

VAT 22.4

Retailer 7.1 gross-includes distribution etc and profit

Oil cost 45.2

Refining 1.2

 

Current Brent barrel is maybe half the above.There is a huge difference in production costs (Saudi $3 to $60 Alberta tar sands).

Taking half,then oil cost is abaout halved,so 45p down to 23 p,an corrseponding VAT & Duty reductions gets fairly near the £1.07 mark-there is a slight derv'petrol diff as usual.

 

The main factor driving down the cude $ per barrrel is much increased US production from hydrolic fracturing (fracking) -so USis importing much less and this releases a considerable surplus onto the world market. The US shale fracking production has broken the link between geopolitical turmoil in the MIddle East and oil prices.

OPEC have decided not to reduce production to raise prices-partly a political move to bring the minor OPEC players into Saudi thinking (Saudis have huge $ reserves and can take a short term hit easily,maybe for longer term gain,if minor producers flounder,and Saudi wants to pressure Russia too.-and Saudi production casts are about $3 a barrel-very low,and so they can get by on a much lower barrel price -say $50 to a more typical $75).

Add in reduced Chinese demand as economy slows,and ditto West-together with improved fuel economy in cars etc.Rusia won't reduce production,as economy is in t-rouble)Isis sells on black market around $40 a barrel.Other energy sources are becoming available.

So surging US production,reduced world demand-prices fall. Fraacking though won't last at current level/prices.OPEC may decide to do to frackers what frackers do to rocks-bust them!,and fracking investment is very high-maybe unsustainable at $70 a barrel,not competitive with SAudi crude. On the other hand,cheaper fracking type production may emerge....better fill up now,it may revert to the traditional boom/burst market -it won't change life,but it has a temporary 'feel good factor' at current retail.

gbal

 

PS -very little relevance in all this directly to shooting,but in the heart of oil rich Oklahoma there was a Xmas salute by veteran riflemen to celebrate the oil boom (so they must have had ammo/powder....) :-)

Share this post


Link to post
Share on other sites

What does a litre of fuel(petrol/derv) cost to produce?

Mike,

 

It is costing more to produce less i.e. easy oils gone. We will reach 'peak oil' as some point, nobody knows when as no one actually knows how much oil is still in the ground in places like Saudi. Here is a reasonable article FYI : http://oilprice.com/Energy/Oil-Prices/9-Reasons-Why-We-Should-Be-More-Worried-About-Low-Oil-Prices.html

 

Fraking 'looks good' as it has just started so is into very good flows bacause they've just opened the tap. But the claimed production rates are questionable e.g. they quote the best rate in a 12 hour period rather than average over say a week or a month and smoe of the accounting is a bit 'iffy' i.e. not putting all costs into ther equasion. long term is poor, think they've drilled something lie 40, 000 wells in the US to get current rate - and they only have a 2-3 year life.

 

Politics in Saudi is also coming into it, they are looking to 'stiff' those who've suppoerted thier enemy i.e. Russia.

 

We are dealing with oil companies who are aiming to make 30% reduction in costs, we are also into techniques for improving % oil recovery from exsiting reservoirs (which historicallyleave as much as 60% in the ground!)

 

All fun and games eh?

 

T

Share this post


Link to post
Share on other sites

http://data.cnbc.com/quotes/%40CL.1

 

I hope this continues! £1.07 Diesel at my Sainsbury's. I wonder if it will go back through £1 a litre this time?

 

99.9p! I now have a fresh 60 litres of diesel in the garage, having rotated last year's supply. I understand that winter fuel has additives which have the side benefit of making it last longer, but I can't find reference to it.

Share this post


Link to post
Share on other sites

Heating oil is now 27p/L before VAT.

 

I picked up some red diesel for 62p/L at the weekend, which didn't seem particularly competitively priced for some reason, I expected it would cost less.

Share this post


Link to post
Share on other sites

Oil will be low for the rest of this year (caveat: if there's no war etc.).

 

But there is significant debt building related to some of the new source e.g. shale thus: http://oilpro.com/image/8969/us-shales-200-billion-debt-mountain which makes their long term viability questionable? Fracking is the same, built on 'not quite true' advertised production rates

 

But that is nothing compared to huge 'values' of derivatives currently in existence, which exceed global wealth and are not know to be 'toxic' unless called in, here is a good visualisation of the stupidity of it all: http://money.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization/

 

Happy days!!

 

 

Terry

Share this post


Link to post
Share on other sites

Gal's analysis highlights the interesting point. If oil was free then petrol would still cost 70p. So when we are at 99p. The cost of the oil, refining and supply chain is only 29p. Feeling ripped off by HMG ??

 

Easy oil has not gone; large easy oil exploration targets in the 'developed world' have gone. The ME is awash with easy oil, look at the production cost. Lots of areas in West Africa have easy oil.

 

The supply glut is a result of a drop in demand but also because the US shale industry, Russians etc have not shut up shop despite the Saudi's trying to kill them off. Classic price war stuff, everybody suffers.

Share this post


Link to post
Share on other sites

 

 

But there is significant debt building related to some of the new source e.g. shale thus: http://oilpro.com/image/8969/us-shales-200-billion-debt-mountain which makes their long term viability questionable? Fracking is the same, built on 'not quite true' advertised production rates

 

 

Yes and there have been corporate failures. This downcycle will test a hypothesis that the shale business is not infact an economic proposition but was an asset bubble. What was happening was that a company would identify a geological target, buy up a heap of acreage, drill a couple of horizontal wells, 'prove' production then sell the asset on at a big uplift as they have proven the value of the reserve. This was all funded on cheap debt and an abundance of equity from investors. Both of these groups now have severe frostbite in the arse from hanging out the window. So if the Saudi's keep going they may well give the US shale industry a severe kicking.

 

The other side of this coin is the resilience of the shale industry in this period. They have retrenched to the good prospects, found ways to complete wells much more cheaply and kept on pumping beyond levels where everyone thought they would just shut up shop - around $60.

 

So it looks like there may be an economically viable business that, because it is land based, can turn back on quickly when prices go back up, which again in theory caps the price rise that is achievable. Perhaps - it depends on how many targets that can be produced cheaply. As they blow down quickly there needs to be supply of targets that would work.

 

Not clear, one of the interesting dynamics at present.

 

The other point is don't expect there to be a UK shale industry. The US had a well established land industry that was just drilling a target at a different depth. We have no land industry and there is not even one fracking unit in the UK. No-one wants to bring one in as it will have sod all to do and the operators don't want to pay.

Share this post


Link to post
Share on other sites

Here's an interesting international comparison of retail prices (mid last year) which separates price from the tax component.

 

Look at the bottom chart:

 

http://www.mbie.govt.nz/info-services/sectors-industries/energy/liquid-fuel-market/weekly-oil-price-monitoring

 

Looks like you guys are getting the big bend-over on the tax side.

 

My son tells me diesel here was down to UK40p/litre a few weeks ago. Mind you, we have road user charges on top of that but only for diesel vehicles.

Share this post


Link to post
Share on other sites

So Chris NZ; according to your link the UK's fuel cost was cheaper than the USA yet due to our tax process we are fourth most expensive.... umm I think some of us have guessed this for some time, the question is what can be done...... treasure island again!

 

Thanks for posting the link.

Share this post


Link to post
Share on other sites

99.7p diesel- Plymouth today .

 

I think we are teetering on the edge of another big drop. I know the politicians tell us it's good for the individual but bad for the economy as a whole; but driving a Land Rover Discovery I am very happy.

Share this post


Link to post
Share on other sites

My buddy in Oklahoma just sent me a snap of the current pump price: $1.48/gal

 

At today's rates, that's about UK 25p/ litre

Share this post


Link to post
Share on other sites

http://data.cnbc.com/quotes/%40CL.1

 

I hope this continues! £1.07 Diesel at my Sainsbury's. I wonder if it will go back through £1 a litre this time?

Most of my local garages in the Norwich area are now at 99.8-99.9 pence per litre for Diesel and just over the £1.00 for petrol.

Share this post


Link to post
Share on other sites

hi filled up my jeep today at sainsburys and it didn't cost me nowt 99.9 a litre I used the wifes card by mistake lol dave

Share this post


Link to post
Share on other sites

75 pence a LT, would you have believed it.

 

That's what you will read in June ....then Govvy Bashing will start at 80% of that is duty.......

Share this post


Link to post
Share on other sites

75 pence a LT, would you have believed it.

 

That's what you will read in June ....then Govvy Bashing will start at 80% of that is duty.......

I don't remember fuel at that price since the late 1990's! Strange times indeed. :o

Share this post


Link to post
Share on other sites

Very interesting video interview with Bob Dudley, Director of BP. You may have to watch a short advert before it starts. In short, he doesn't see a recovery in the oil price for a long time.

 

http://www.telegraph.co.uk/finance/newsbysector/epic/bpdot/12111113/BP-boss-oil-wont-hit-100-a-barrel-for-long-time.html


Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

RifleMags_200x100.jpg

Northallerton NSAC shooting.jpg

border_ballistics_UKV_ad.jpg

dolphin button4 (200x100).jpg

CASEPREP_FINAL_YELLOW_hi_res__200_.jpg

rovicom200.jpg

BHTargets200.jpg

Lumensmini.png

CALTON MOOR RANGE (2) (200x135).jpg

bradley1 200.jpg

NVstore200.jpg

Danny Trowsdale 200.png

safeshot 200.jpg

tacfire 200.jpg

blackrifle.png

jr_firearms_200.gif

valkyrie 200.jpg

tab 200.jpg

 

 



×

Important Information

By using this site, you agree to our Terms of Use and Privacy Policy