OIL prices could rocket in the next few weeks exacerbating the fuel shortage and leading to a winter energy crisis, City analysts are warning. That in turn will put intense pressure on central banks to shove up interest rates faster than they would like. Crude is already at a seven-year high, after Opec refused last night to increase production levels in order to keep profits up. Brent Crude today rose xx to xx and might surge to $100 or even $120 say some experts. That would feed through to higher prices for home heating and at the pump. Gas and coal are already at the highest price on record.
Bank of America said: “Like in the 1970s or in 2008, oil could once again become the destabilising factor that causes the next macro crisis.”
It says $120 a barrel is possible. The government says the petrol crisis is easing as the army helps get fuel to forecourts, but problems remain, especially in London. While the jump in oil is partly just a sign of economic recovery, it is feeding inflation which in turn could derail growth. The Bank of England is still insisting that inflation will peak at 4% and then quickly fade. There is growing scepticism about this forecast. Oanda’s senior market analyst Jeffrey Halley said: “Assuming the energy squeeze is the new normal, it is hard to see transient inflation being as transient as the world’s central bankers are forecasting/hoping it will be. The effect will be felt throughout the world’s supply chains.”
Deutsche Bank warned that the “spike in energy prices has led to renewed fears about inflation accelerating even further than current forecasts are implying, with knock-on implications for central banks”.
Russ Mould at AJ Bell said: “A sustained spell of high energy prices could slow the recovery and check demand growth. That perhaps leaves consumers and companies and governments with an uncomfortable near-term choice between their desire for a greener, more renewable world and higher fuel bills.” NN: Being smart is really really a good thing. But do you want to know the really bad part? Its being forced to be around so many stupid people. Specifically the greeneewinnnieee who have made great strides doing stupid. Their thinking went like this. Shut down the pipelines. Stop fracking and oil exploitation under the dubious excuse of saving some endangered species ( or some burial ground where the spirits will trip over the buried pipeline) no one ever heard of. Embarrass investors from making money available to fund fossil fuel projects. And get government to regulate to death export ports, new wells, fracking and make it impossible to produce oil…. And they made great strides doing this. Here comes the stupid part, They have stopped dead in its track the utilization of clean burning natural gas a a bride fuel in transportation and for electric generation. The thinking was choke off fossil fuel supplies and you force the world to turn to renewables. So they got their greenneee wet dream. One little problem is their is not enough renewables to fill the gap… Worse yet the technology is just not their yet. So the outcome is they have killed the bridge fuel natural gas, And the world is turning back to the most polluting fuel of them all coal! And the hell of it is they still do not realize what they have done…….. More coal is being burned then ever before!