This current bout of petrol price plummeting is due to the OPEC cartel, and in particular, the SaudisRolebama wrote:I have been told that the same thing is happening now. That Russia has upset USA, and this is their way of getting even
They're pissed off that America has gone self-sufficient for oil & gas (their shale gas "fracking" programmes have been hugely successful), so the USA isn't buying Saudi oil & gas. They're also pissed off that Russia has been so successful at selling its oil and gas to Europe/Eurasia - it's Russian gas that we get in the UK nowadays.
So the Saudis, who have TONS of cash lying around and HUGE reserves of oil and gas, and therefore can afford to do so, have ramped up production massively - thus flooding the market and radically devaluing oil and gas in the process. Their idea is to make Saudi oil so cheap that it's no longer economically viable for the USA and Europe to produce it locally, or buy it from anyone else other than the Saudis.
The knock-on effects are devastating - some other oil-producing nations (Nigeria in particular) have had to completely change their national budget because they won't have the oil revenue any more. There are hundreds of folk here (mostly onshore staff so far) in Aberdeen who are being laid off - both BP and Schlumberger have announced large staffing cuts. Investment in North Sea operations is dying fast. Share prices for oil companies has plummeted along with the oil price. Oil companies are freezing their budgets and cutting back on spend for all but essential operations. It's an economic disaster for countries that don't have the Saudi's massive cash reserves, and given the global economic downturn - which we're only just starting to get over - very few other countries have any cash reserves at all.
Unfortunately the gas market isn't as quick to react to price changes, so it'll be at least 6 months before the wholesale gas prices drop enough for even the Big 6 gas companies here in the UK to grudgingly lower their prices by much. I know E.ON have just announced a reduction, but it's tiny in comparison with the 40p+ reduction in pump petrol pricing that we've seen lately.
Yes, this is good for motorists and haulage firms - but there's a massive sting in the tail too. I'm all for lower petrol/diesel prices - but I'd rather it was done by reduction of fuel duty rather than by reduction of the wholesale oil price.
No offence intended, Dai, as you guessed, it was more a pop at big-business financial sector CEOs
), and the wife has a good job too so we're doing fine, much better than a lot of households I'm sure! Unfortunately it didn't work out for me and It cost me a big chunk of money that in retrospect I wish I'd done something else with. Won't be rushing into something like that again but I had to give it a go, if I hadn't I'd always be wondering.
