Radio 4 interview: why is the oil price plunging?
Posted on Saturday, December 6th, 2008
The oil price has fallen by 25% in a week, to around $40 per barrel, more than $100 lower than its all time peak in July. To hear my interview on Radio 4’s flagship Today programme this morning about the reasons for the collapse, and the likely outlook, follow the links below.
Listen to the discussion.
Radio 4 Today Programme
NB Some listeners have reported problems with lastoilshock.com podcasts using Quicktime, but they seem to play perfectly well on RealPlayer and Windows Media Player.
Very good, clear and correct. as limits are reached, volatility increases. bouncing into and back off the top is the story over the next few years. the only point i’d add is that volatility makes the necessary strategic planning, at global and national levels, almost impossible. what institutions have both the time horizons and the investment cash to develop alternative energy infrastructure on the appropriate scale?
and the oil companies, service companies are again looking to reduce staff, despite their own assurances after the last slump that they would never do it again.
It seems now that the accountants are running the show, which means to appease the shareholders the profit margin must remain the same or increase.
When the next round of oil hikes come and business is booming again, there will be no way to fulfill contracts because there will be a shortage of bodies to fill the gap. The cost of this will be in excess of the cost it would have been if they had never laid off their workers.
Round and round the merry go round goes, will they never learn.
