UK continually screws us over - why has oil crashed but out forecourt prices have not

[Jim 2]

Already at that price in a few places. Even saw 97.9 mentioned online somewhere in the UK today.

 

What a time to be alive!

[seanl82 23]

I think I remember when it was last below £1 per litre. 2007!

[coullstar 0]

Not great for oil industry in afraid. Cheap petrol is ace but there is consequences for this. It was needing a reality check but it's getting a bit political now and it's going to start playing with people's lives in afraid.

[fla 9]

Not great for oil industry in afraid. Cheap petrol is ace but there is consequences for this. It was needing a reality check but it's getting a bit political now and it's going to start playing with people's lives in afraid.

 

whilst a low oil price is ultimately good for consumers, it means that all the major projects will not be profitable and many have been either mothballed or completely shelved. Not good for the industry with major impact on jobs, suppliers, sub-suppliers and SMEs. Larger firms can ride out the storm but it may also lead to a brain drain as a lot of well qualified people head elsewhere or indeed leave the industry altogether. So what happens when the price picks up again???? there's no national resource any longer, so we lose out economically again.

[Sean_Jaymo 0]

For somebody trying to break into the industry, the timing is pretty poor but then a few companies are still recruiting so I'd imagine it the upstream part of the business that will be struggling short term.

[Jim 2]

Not great for oil industry in afraid. Cheap petrol is ace but there is consequences for this. It was needing a reality check but it's getting a bit political now and it's going to start playing with people's lives in afraid.

 

I'm extremely sympathetic for the people who are going to lose their jobs here as it's not their fault, and as you say it's political. But it's hard to feel sorry for the companies involved, and I'll be frank.. where was the sympathy for the motorist or the average joe from UK based oil producers when the prices were through the roofs? I don't think it's any secret that the oil industry has enjoyed extremely healthy incomes over the last few years with extremely high prices at the pumps, and they just sat back and raked it in. 6 months of cheap fuel and the entire industry is on it's backside already?

 

That's the nature of business when you work in such an industry - when times are great, they're great. And when times are bad, they're bad. People involved in the industry earn extremely well but the trade off is that markets can change, and things can dry up overnight. Surely anyone who goes to work in such an industry must understand that it's never guaranteed to be a secure, high paying job for life?

[coullstar 0]

Agree entirely regarding the operators, they are the ones to blame here as they have been paying silly amounts to contractors so for them the price to lift a barrel has shot up a fair bit in the last 7-8 years. Some are around $60 a barrel so at $50 to sell it shoes the issue.

 

Its the knock on affect as in essence the operators only own platforms and plan the work. All work carried out on the rigs and onshore prep is by service companies and its these companies that will be hit hardest. The closer you are to the wellhead the less chance of loosing your job as they will still keep the rigs going, they just wont be drilling or recompleting new wells.

 

I agree its the nature of the business and as said its good that some people up here will get a reality check but it totally sucks when there is a game going on and affects the more genuine working folks.

[Jim 2]

I agree its the nature of the business and as said its good that some people up here will get a reality check but it totally sucks when there is a game going on and affects the more genuine working folks.

 

Again I just want to say I entirely agree here and am sympathetic to those who are going to be affected.. redundancies are never a nice thing to have to go through, especially if in a particular region where it's the primary type of job and it'll just dry up overnight leaving you with very few options :(

[coullstar 0]

Don't worry wasn't commenting specifically at you. Its just good to make it a little clearer as the perception is that its just all producers involved in the industry when in fact there are hundreds of companies reliant on the work.

[corrado wannabe 13]

It just shows how fragile the whole thing can be.

 

I went through something very similar many years ago when I worked with Motorola.

 

Semiconductor industry was flying high and wages were reflecting this. As hard as it sounds, many people working in the industry were relying on the good times lasting forever and living their lifestyle accordingly. Rather than making hay while the sun shone, they were basing mortgages and lifestyle on salary, plus overtime. Dangerous cocktail.

 

As you say Coullstar, the headline figure is the numbers directly employed by the industry, however the huge amount of companies servicing the industry that rely on the business is the real killer.

 

You just have to look at places like East Kilbride when Motorola went, Bathgate when NEC, Motorola went, many people losing well paid full time jobs and going into part time, zero hour contracts. Not good.

 

That said, if your commodity is open to market forces, as hard as it is, I would rather the money my family spends per month on fuel is halved, rather than keep other people in work.

 

The main political issue that seems to be around at the moment, is the distribution of wealth throughout the entire country. This appears to be focused on London, however Aberdeen and Edinburgh (in a Scottish context) appear to be doing the same, and I for one, would not want to see that continue to propped up by Gvt intervention, at my cost and the cost to the rest of the country.

 

Dougie

 

Just my tuppence worth, and I have nothing but sympathy for people under threat of losing a job, as I have been through it myself

[mic_VR 3]

Where do you lot live?!?! I'm still paying £1.10 here in sunny Cambridge... :(

 

So it appears that China* are buying as much oil as they can right now and the Saudi's* think we'll never see $100 a barrel again!

 

*Note - Neither of these points may be entirely true but I definitely read it somewhere...

[loepan 11]

wont see it here either mate don't worry, think we are at 1.10 lowest, saying that we always pay more than most where I am

 

has anyone thought about investing whilst its low

[mic_VR 3]

has anyone thought about investing whilst its low

 

Not sure where I'd put it all. Doubt the wife would let me keep barrels in the spare room....

[loepan 11]

:dance:

[g0ldf1ng3r 15]

Nice to see this thread still live.....& even better to see the forecourt prices are finally reflecting what is going on, even if it has taken them a while to react.

 

without getting too involved, no matter what industry you are in if you are employed there is a responsibility upon yourself to make appropriate plans for the event of being out of work, businesses need to do the same

 

I was at GKN when the automotive industry crashed and was caught up in the many many thousands who were made redundant at that time, my mom too. it was only because I had planned for such an event & had redundancy cover & a little savings that I was able to cope with the fallout.

 

(I also chose to use the redundancy money I got to buy the VR6 I had always wanted ;) - silver lining & all that lol)

 

similarly, with my dad being a plumber, I know that traditional trades such as builders, electricians, plumbers etc have to make plans & allowances for their 'slow periods' IE Christmas or even days that are rained off as 'no work, no pay' in those jobs

 

thus IMO these companies should quit their moaning & cope with the thought they might make millions rather than billions this year

 

mic_VR to answer your location question im only a couple of miles from the petrol station shown in the news yesterday with the 99.7p per litre price & today for the 1st time in a long time I actually had a spirited drive to work as my petrol gauge was more favourable than in many many years

 

oh, & worth a mention that when I first brought my VR Tesco super unleaded was 99.9p per litre - fingers crossed VPower gets that low again lol

[g0ldf1ng3r 15]

Not sure where I'd put it all. Doubt the wife would let me keep barrels in the spare room....

 

ha ha that nearly made me spit my tea out when I read that lol

[Kevin Bacon 5]

But it's hard to feel sorry for the companies involved, and I'll be frank.. where was the sympathy for the motorist or the average joe from UK based oil producers when the prices were through the roofs? I don't think it's any secret that the oil industry has enjoyed extremely healthy incomes over the last few years with extremely high prices at the pumps, and they just sat back and raked it in. 6 months of cheap fuel and the entire industry is on it's backside already?

 

That's the nature of business when you work in such an industry - when times are great, they're great. And when times are bad, they're bad. People involved in the industry earn extremely well but the trade off is that markets can change, and things can dry up overnight. Surely anyone who goes to work in such an industry must understand that it's never guaranteed to be a secure, high paying job for life?

 

As hard as it sounds, many people working in the industry were relying on the good times lasting forever and living their lifestyle accordingly. Rather than making hay while the sun shone, they were basing mortgages and lifestyle on salary, plus overtime. Dangerous cocktail.

 

That said, if your commodity is open to market forces, as hard as it is, I would rather the money my family spends per month on fuel is halved, rather than keep other people in work.

 

Completely agree with those points. No one showed any sympathy what so ever to the innocent people who lost their jobs in the Finance sector because of greed at the top, so why should I sob into my tissue about the oil industry potentially collapsing?

 

Humans never learn. They knew it was coming but did nothing. The good times are just not sustainable. Over the next decade or two as alternative energies finally gain momentum, I can't see demand for crude remaining high anyway. Supply and demand and all that.

 

The whole world is volatile at the moment and we're lucky to have a job. As traumatic as it is losing your job, it's not a god given right to have one and people in volatile markets should have a back up plan imo.

 

I'm sorry but if you asked the nation: "Go back to paying £1.30+ a litre to keep oil industry jobs, or pay 99p a litre?" What do you think the over-riding response will be?

[davidwort 0]

$45 a barrel today, it's clearly an unhealthy movement in a commodity the whole world relies on so much, the economic and political implications will take some time to play out as the rises did, I think a gradual reduction would have been better for all of us long term.

 

I've sympathy for people who lose their jobs in Scotland over this, bubble or not, (the most immediate effect the UK will see) but it makes the SNP projections look ridiculous now (over $100 a barrel wasn't it?), just as well for Scotland they stayed in the UK, the industry needs the UK taxpayer now.

 

And on a related matter, EON boss on the radio this am, proudly announcing a few % off their domestic gas prices, after wholesale gas has been dropping for over a year.

[g0ldf1ng3r 15]

this makes an interesting related read...

 

http://uk.businessinsider.com/uk-deflation-might-be-a-good-thing-2015-1

 

oh & a golden quote from this one http://uk.businessinsider.com/oil-below-45-for-the-first-time-in-six-years-2015-1

 

which pretty much proves those running the energy markets have been manipulating prices for a long time - it seems not only gas & electric but fuel too

 

That's following comments by the oil minister of the United Arab Emirates reported in the Wall Street Journal. Suhail Mohamed Faraj al-Mazrouei told an energy event in Abu Dhabi that “(OPEC) cannot continue protecting a certain price. That is not the only aim of OPEC."

 

surely that should read 'cannot continue protecting the vast sums of money we are lining our pockets with'!!

[Kevin Bacon 5]

Meh. All I care about is V Power dropping to 99p, or less.

[Ray1965 10]

Would it be right to say that the oil companies now will be bulk buying and stock piling their stocks as the price of the raw material is very low. lower price buy more?

I work in the steel industry, when the price of scrap goes down we have a spell of mass bulks of scrap arriving to stock pile.

IMO this will be a flash in the pan and the price will eventually go back up for crude.

I could be wrong here ,what do you guys think?

[g0ldf1ng3r 15]

Meh. All I care about is V Power dropping to 99p, or less.

 

I 2nd & 3rd that motion Mr Bacon!! :D

[mic_VR 3]

Would it be right to say that the oil companies now will be bulk buying and stock piling their stocks as the price of the raw material is very low. lower price buy more?

 

I doubt it. There would be no point a big oil company buying a stock of oil which potentially could go down in value and just eat up cash reserves needed to run the business.

 

What's more likely, IMO, is that the big companies will not do anything until the price to extract the oil gets closer to the price to sell. At the moment the big guys are happy to watch the small guys go out of business as they are unable to sustain their business. They'll probably also hold back on selling the stock they do have in the hope the supply/demand shift will swing back the other way once all the small companies aren't producing anymore.

 

You'll also see loads of projects shelved or stopped as things like shale extraction and tertiary extraction techniques cost too much for the oil produced.

 

Unfortunately all that means for us in the UK is production stopping. Under $50 a barrel most of the North Sea extractions are losing money. Whereas in the Saudi Arabia I think they were saying the other day they'd be happy for it to drop to much further as the cost of extracting a barrel is about $10.

 

Man this thread is a bit serious...

[Rustynuts 0]

Would it be right to say that the oil companies now will be bulk buying and stock piling their stocks as the price of the raw material is very low. lower price buy more?

I work in the steel industry, when the price of scrap goes down we have a spell of mass bulks of scrap arriving to stock pile.

IMO this will be a flash in the pan and the price will eventually go back up for crude.

I could be wrong here ,what do you guys think?

 

I too work in the steel industry and I believe prices of finished products are more reflective of raw material costs rather than traded rates such as oil. Crude will go back up for sure, it is a matter of when and what the conditions are that cause it. Eventually those producers who have a high unit cost will be lost and the supply will reduce, this will bring things back into equilibrium and any small changes in the market due to supply or demand could see the price rising again.

[Ray1965 10]

I too work in the steel industry and I believe prices of finished products are more reflective of raw material costs rather than traded rates such as oil. Crude will go back up for sure, it is a matter of when and what the conditions are that cause it. Eventually those producers who have a high unit cost will be lost and the supply will reduce, this will bring things back into equilibrium and any small changes in the market due to supply or demand could see the price rising again.

 

Yeh, Mic and Rustynuts (lol, top name) good points. it was just a thought. God the politics are so deep.