Oil Prices Get Lower

Mr Putin, Leader of the Russian Federation has suggested that the fall in oil prices is due to American shale gas production. I doubt whether this is the sole factor, and no doubt Mr Putin would acknowledge other factors, such as the Islamic State of Iraq and Syria selling oil for only $30 a barrel and increased production in Libya, but as Mr Putin points out, if oil prices fall to less than $80 a barrel most shale gas production is uneconomic.

Closer to home it is not only shale gas production that would become uneconomic but also many of the oil fields of the North Sea upon which the Scottish Independence movement pinned their economic gas for an independent Scotland.

I do not have any special ability to predict future oil prices, but it seems to me that whereas previously threats of conflict in oil producing regions pushed oil prices higher and higher, these days actual conflict in oil producing regions sends oil prices lower; the conflict has to be paid for and in most oil producing regions the only currency is oil.

It also seems to me that a very cold winter in the Northern Hemisphere will send oil prices higher.

Meanwhile at the petrol pumps there is very little evidence of any significant fall in the price of oil and diesel, but that is entirely predictable.

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