Oil now $36 a barrel

Whitelighter

Whitelighter

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even with OPEC doing their best to restrict supply, it seems that the global demand has reduced to a very low level. Must be the lowest price for 5 years?

Its been an odd year of record highs and record lows and I for one wonder when it will stop. I know we are now weal against every other currency in the world (with the exception of Zimbabwe) but surely we are now being blatantly overcharged for oil products?

The low oil price cant bode well for the world economy, and perhaps is the best illustartor of exactly how monumentally screwed things are. Especially when the consumer isnt feeling the benefit.
 
Last time oil was this price seems to be in May 2004. At that time a litre of unleaded cost on average 81.8 and diesel 82.8.

While I can get petrol for 86.9 at the mo, diesel is still 98.9. Duty on the two fuels is now the same so these figures just don't add up. Where is the extra money going for diesel?
 
-and with marine refuelers not selling as much 'cos of the winter, they're not getting in the lower cost fuel in to top their tanks.

With empty tanks and a need to refuel this weekend - where's the cheapest on route Portsmouth to Hamble ?
 
Well the volatility hasn't stopped today. US Crude for Feb delivery up $6 this morning to $42..... In much the same way that $140+ was not justified by the demand back in July, a price in the $40s isn't justified now. Consumption has fallen, (~5% in the US) but inventoies around the world are not especially high. At some point in 2009 the oil price is likely to recover, unless the world economy totally collapses of course. Now, if I could just tune in my crystal ball to see ahead so I can make a killing on oil futures.....
 
It's because the underlying price of diesel is now much higher than petrol. Diesel used to be a fair bit cheaper then petrol in France, cos the fuel price was about the same, but diesel duty is something like 10-15 cents lower (can't remember the figure). Now the two fuels are about the same price at the pumps, although the duty difference hasn't changed

In UK fuel duty on petrol and diesel is the same, so the difference is seen at the pumps. ie. the 10 pence premium on the underlying price of diesel over petrol is not masked by a 10 pence lower duty.

I guess it's cos so many people drive diesel cars now, price always comes back to supply and demand in the end.
 
I think you are right Nick. I have always bought diesel cars for SWMBO becuase she has had a few 4x4s but in relaity she only does about 8,000 miles a year so for the next car I think we will go back to petrol.

Which means I can have a lovely BMW straight 6 again /forums/images/graemlins/grin.gif
 
Get a V8, you know it makes sense! /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif

Cheers
Jimmy
 
Sorry to confuse - I am looking at the price for February delivery. Anyhow, look here and you can see the projected upward trend next year.
 
Ok, the duty in May 2004 was 47.1ppl on unleaded and.......47.1 ppl on ULSD.

Soooooo if, with the same level of duty the difference between Petrol and Diesel was just 1ppl in 2004, why is it now 12ppl when the fuel duty on the two fuels is still the same, albeit higher?
 
I don't think i'd explained myself very well. I was supporting the view that the underlying price of diesel has gone up in comparison to petrol (ie. it's not down to changes in duty), and was trying to show that it's happened in France as well.

In France though, the pump price of diesel has moved from being much cheaper than petrol, to being the same price as petrol, 'cos the duty on diesel in France is less than the duty on Petrol.

In fact, the UK is the only country in Europe that does not have lower duty on diesel than on petrol.
 
It doesn't, I think it costs less, but production costs seldom set the price of anything, it's demand that does that.

In the past, trucks and planes used diesel (jet fuel is similar to diesel I think?) and cars used petrol, so there was a certain balance of demand between the two that set the relative prices.

Nowadays lots of cars use diesel, nearly all cars in places like France, but so do trucks and planes, so there is higher demand for diesel than petrol, hence the relative price of diesel has gone up.
 
[ QUOTE ]
Sorry to confuse - I am looking at the price for February delivery. Anyhow, look here and you can see the projected upward trend next year.

[/ QUOTE ]

Projected upward trend .... means jack s......... /forums/images/graemlins/wink.gif /forums/images/graemlins/grin.gif

Speaking to trader this morning - his comment "Who the hell knows about tomorrow in this game !!"

One problem is there is a lot of tonnage at Sea ... literally floating storage ... deals are being rewritten, struck that changes are flying around. Shore terminals may have free space - but that means nothing. Overall there is surplus.
 
That's what I suspected. So who is making this extra profit. The big oil companies tell us they make no money from retail fuel sales, The retail fuel outlets tell us theu only make a penny or two on each litre sold. Somewhere, someone is raking in alot of dosh with an extra 12+ppl on every litre of diesel sold.
 
Yup. As I've said on here before, one gallon of crude will only give so much petrol and so much Diesel, and the ratio doesn't change, ergo, if demand for deisel is higher than petrol, then if they produce enough diesel to meet demand, they probably are producing more petrol than is required, hence lower price.
 
Nigel, sligthly off topic but is there a dfference between North Sea crude and Middle East oil. Does one make cleaner or more petrol and diesel than the other. Just curious.

Pete
 
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