The Price of Oil and Fuel

So, we are all starting to really feel the effects of the rising price of Oil.

I found this snippet on another blog and thought it would be great to share….

$200 oil is still very cheap. 200/160= $1,25 per liter of oil.

1 barrel of oil produces as much energy as 12 workers during 1 year, and at $200 it is still cheaper than Coca Cola.

The problem is that we are used to cheap energy, and this cheap energy is essential especially for aviation. But with production stagnant at approx 85mb/day, and demand rising despite record prices, there might be some dark clouds ahead.

Aviation is beginning to reel from the rising prices… jet fuel went through the $1,300-a-tonne mark last week. Attempts by airlines to hedge against future price increases is becoming more difficult, as hedging providers are being careful not to be burned by price rises. British Airways are planning to reduce flight schedules commencing later this year. Falling demand for tickets limits the airlines ability to raise fares. Other airlines will no doubt follow the the BA lead. Gasoline prices will continue to rise in line with the price of crude. perhaps, if governments raise taxes in an attempt to reduce demand, then gas price rises will exceed the crude price rises. Oh woe are we! The worst is yet to come.

John Griffiths

Posted in Rantings.