So when will the price of petrol drop?

Discussion in 'Current Affairs, News and Analysis' started by flamingo, Sep 22, 2008.

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  1. Now that the price of crude oil has dropped from $147 to $91 a barrel, can we expect to see a drop of petrol prices, or having proved that we will pay over £1.20 L for it, are the oil companies not going to do anything about it?

    http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/09/15/bcnoil215.xml

    I see that in Ireland the government is demanding an explanation from the oil companies on the price they are charging (the alleged quote from the Irish PM is "bring those f***ers in"), I can't help but wonder when might we expect to see the same kind of action here? Of course, the increased tax revenue in the form of VAT and increased revenue off the oil companies might be delaying any governmental pressure here.

    http://www.independent.ie/business/personal-finance/latest-news/oil-firms-face-grilling-over-failure-to-drop-petrol-price-1479704.html

    Any insiders who read ARRSE able to throw any light on it?
     
  2. Yeah, like they're going to cut the prices at the pump....
    After the latest profits where announced, all they can see is their bank balances soaring...
     
  3. Reduce prices? Welcome to the dirty face of capitalism. The whole sudden and dramatic increase in the price of crude had no connection with production at all, in fact it had little at all, if anything, to do with anything concrete, except perhaps forcing a production and expansion slowdown in China. One of the oldest tricks in the book, rack up prices on the basis of a ( fake) shortage, let the mugs get used to it and then onwards and upwards. And what are drivers going to do about it? Go on strike? Take the train instead? Well and truly shafted.
     
  4. I just paid 1.06 a litre of petrol.
     
  5. Firstly, crude oil is back up to $100 per barrel, last spot price I read was $101.8 for Brent Crude about 2 hours ago.

    Secondly, pump prices reflect the crude price several weeks past. So, if the price of crude leaps 20% today and stays there, the pump price shoots up in a few weeks time. What you have seen is a steady rise over the past few months, so you have been fooled into thinking that the pump price increase relates to a crude price increase on the same day. Not so. It is entirely possible for the pump price to increase on the same day as crude drops - or vice verca.

    That's not to say the oil companies aren't benefiting from these fluctuations, they are. All it needs is them to hold off a day or two with a pump decrease, and they're quids in by millions.

    Why is the oil price so high?
    1) Highest levels of demand for crude in history.
    2) Instability of supply due to certain military interventions.
    3) Profiteering by speculators.
    4) 'Friendly' Arab states ripping the price for maximum profit.
    5) Disproportionate levels of tax levied by HMG.
     
  6. When hell freezes over!
     
  7. Whitecity as ever has pretty much nailed it with his explanation. I would also add the dollar factor as there is currently a contrarian effect between the dollar and a barrel of oil. Weak dollar = high oil price & strong dollar = slightly less high oil price :)

    Nymex crude about 5 minutes ago was nearly $110 and this tends to be the headline product oft quoted by the press. Unsurprisingly the dollar was weaker today. The pump price may fall a bit further yet but the latest trend in the last few days suggests that it 'may' not last
     
  8. Exactly.

    Crude price is currently rising (10%+ in last 5 days) and people are moaning that that the drop in pump price is enough...

    As an indicator, current Brent Crude spot price is now $103.7. That's a rise of $1.9 or virtually 2%in the last 4 hours!
     
  9. Don't forget that we are paying in pounds, and the pound is currently even weaker than the dollar, so we don't get very many dollars worth of oil for a pound.
     
  10. Its gone even higher earlier this evening touching $120 / barrell.

    http://news.bbc.co.uk/1/hi/business/7630513.stm

    BBC article is just one side of the story. The financial news sites are saying its due to a supply squeeze as most of the US refineries have been out of commision for 2-3 weeks due to Hurricane Ike and they have only just woken up to the fact that they can't fulfil their contracts without paying through the nose.
     
  11. So, if you are still reading this flamingo, if we follow your cunning analysis/plan/wish, tomorrow will see a pump price increase of 16%. :)
     
  12. That rise will take a little while to filter through, but things don't look too good at the moment. One positive aspect is that the dollar fell against sterling today. Not enough to offset the 12% jump in a day, though!

    Litotes
     
  13. The squeeze seems to be traders trying to close their positions,at the end of the trading period.Price dropping back now.Recession=less fuel used=less demand=lower price(eventually)
     
  14. Weel. now that "short selling" has been banned, the speculaters turn to crude oil.

    I wonder what price crude if the city banned anyone buying crude who was not employed as a buyer for a refinary ie Shell, Bp etc.?????????????????
     
  15. The price of fuel has dropped a lot here in Germany. Diesel peaked at around € 1.50 per litre, it is now about € 1.34. Petrol has come down by a similar amount, with a price difference of € 0.10 per litre between diesel and petrol. Holland and Belgium have shown similar trends. This is all the more interesting when you consider that the above mentioned countries have no oil of their own, whereas GB does.