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Record Oil Prices

MarketWatch reports that oil prices had the biggest daily gain on record, going up $11 in one day.

They claim that this is due to an impending Israeli attack on Iran and a weak US economy. $150 per barrel is the price that they predict for the 4th of July. That’s an interesting choice of date, I wonder whether they will be talking about “independence from Arabian oil”…

The New York Times has an interesting article on fuel prices [1]. Apparently sales of SUVs are dropping significantly.

The US senate is now debating a cap on carbon-dioxide production. The NY Times article suggests that if the new “carbon taxes” could be combined with tax cuts in other areas. If implemented correctly it would allow people who want to save money to reduce their overall tax payments by reducing fuel use. Also as increasing prices will decrease demand (thus decreasing the price at import time) it would to some degree mean transferring some revenue from the governments of the middle east to the US government.

The article also states that the Ford F series of “pickup trucks” was the most popular line of vehicles in the US for more than 20 years! But last month they were beaten by the Toyota Corolla and Camry and the Honda Civic and Accord. Now Ford needs to put more effort into their medium to large cars. With the hybrid Camry apparently already on sale in the US (their web site refuses to provide any information to me because I don’t have Flash installed so I can’t check) and rumored to be released soon in other countries Ford needs to put some significant amounts of effort into developing fuel efficient vehicles.

According to a story in the Herald Sun (published on the 23rd of April), survey results show that 1/3 of Victorians would cease using their car to get to work if the petrol price reached $1.75/L [2]. Now the Herald Sun has run a prediction (by the assistant treasurer and the NRMA) that $1.75/L will be reached next week (an increase of just over 10 cents a liter) [3].

The good news is that there will be less pollution in Australia in the near future (even if $1.75 is not reached I am certain that the price will increase enough to encourage some people to use public transport). The bad news is that our public transport is inadequate at the moment and there will be significant levels of overcrowding.

11 comments to Record Oil Prices

  • I live in Europe, where price of petrol is around 1Euro/L. Even though I can see the positive impact of high oil price. The importance of fuel consumption as a factor in choosing a car is biggest ever. The potential to drive innovation in developing alternative fuels is nice too. However I can’t see any rush to either public transportation or changing of car usage pattern. People just complain the prices are rising. When the price first risen above 50 cents everyone was complaigning it’s too much for anyone. 100% later I hear the same. And the number of cars just keeps on growing anyway…

  • maria

    …… I just hope you people from countries without Oil, one day finally realize that you have to change the way you think, the way you live, before is too late…

  • I agree completely. Apart from the fact that all the people should do as you say. Energy conservation in oil-producing countries is non-existent.

  • Adrian

    Marcin, that’s not true for all oil-producing countries.

    The country with the third-most oil exports in the world (more than countries like Iran or Kuwait) is Norway, and fuel prices there are > $2.50.

  • Craig Askings

    Toyota are going to be building the Camry Hybrid in Australia as well (2010)

    http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUST30854820080610

  • @Adrian: Norway is a good example of fossil fuel conservation, but you missed my point.

    I said: “Energy conservation in *oil-producing* countries is non-existent.”

    You said: The country with the third-most *oil exports* in the world is Norway (…)”

    Fourth actually, as Azerbaijan is third (taken in bulk with Russia in some places as 2nd). Arabic countries, Russia, Azerbaijan, Kazakhstan, Venezuela, Mexico, Nigeria, even the USA each *produce* way much more oil then Norway. They are not exporting that much for two reasons. Firstly, because they are not energy efficient due to low price of domestic oil (not true only in USA, but they have low tax on fuel). Second, in Mexico City alone there lives 10 times more people then in Norway. That’s why Norway is on top of the export list.

    The price of petrol in Norway is as it is for a few reasons:
    * ecology of production, distribution and processing of oil is a major factor, unlike in other oil producing countries (apart from the US maybe);
    * the price of petrol is based on real market value of Norwegian oil (which is very high due to high work costs);
    * taxes on fossil fuels in Norway is among the highest in the world.

  • Adrian Bunk

    @Marcin:

    Sorry, but some of the things you said do not seem to be true:

    The US Energy Information Administration lists Azerbaijan separately, but only on place 18 in the world: http://tonto.eia.doe.gov/country/country_energy_data.cfm?fips=AJ What is the source for your information?

    Mexico City does not have 10 times more people as Norway – depending on whether you take the actual city or the Metropolitan area Mexico city is only twice resp. four times as big.

    And regarding fuel prices in Norway: Norway has more or less the highest fuel prices in Europe. No matter how expensive their oil production is, that wouldn’t justify why fuel made from Norwegian oil is more in expensive in Norway than in other European countries (where you’d even have to add transport costs to the prices). Taxation is actually the reason.

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  • @ Adrian: It’s not a geography forum. The fact is Norway is one of the smallest oil producing countries. Anyway that’s not what I was talking about in the first place. One way or the other Norway and UK may be the lone examples of proper energy conservation among top 20 oil *producing* countries. [1] That’s what I was trying to say before and thant you for pointing it out.

    The fuel prices in Norway are as high as they are because of the three factors I named. Taxes are the most important factor of fuel price in Europe, but it has nothing to do with conservation at all. Norway is the most expensive country to live in anyway.

    Oil transportation costs are very low compared to other goods. Poland doesn’t buy Norwegian oil (not in major amounts anyway), because its cost is much higher then imported from Russian Siberia or Kazakhstan. True, long term contracts play a role here as well.

    [1] https://www.cia.gov/library/publications/the-world-factbook/rankorder/2173rank.html

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