Interesting article on the "real" reasons behind the rapid rise in the price of crude, as some members here have already alluded to.

Sorry about the very large paragraphs! The posting set up here automatically bunches up separate paragraphs that are copied and pasted from say Word etc. Why this should be, I have no idea.

When is Autocar going to sort out the particularly user-unfriendly set up of this forum?? When hell freezes over, I guess.

Overdrive -  I'm not sure if you're making a point regards speculators or just posting the story and sitting on the fence! Speculators (pension funds, banks with capital, large investment funds etc) are currently putting money into commodities (a trend that's been growing for some years) and piling out of property (very wise) as it's declining with impacts of slowing economies and the sub-prime scandal.

So if you had a huge pension fund to administer where would you put your money? Equities/Shares, commodities (oil, corn, pork bellies), in the bank, in government loans or into property?

Funny we only judge speculators when the markets are rising (making profits) which misses markets declining where many speculators lose that same money. All speculators do is make market price rises happen quicker, for a shorter period and make prices drop faster, for a shorter period.

So calls for regulation of speculators (usually by socialist journalists) is like government telling you where to put your money and central control of the economy (the Communists went bankrupt trying to do this). Govt advise is not to be trusted - see George Sorros making £billions out of the British Govt when they put money into Sterling to keep the pound strong (a vein and extremely costly mistake for the British public purse costing us £biilions).

By all means regulate spreading market rumours and scare stories that a minority of speculators may use to move markets in their favour (there's a case in London right now). But there's nothing you can do about speculation and free markets except make the usual kack handed political mess!  

BTW Autocars forum is excellent in terms of ease of use and speed for navigating around quite frankly. There's a couple of issues (inability to edit posts after you've posted them with spelling mistakes etc and spacings) I agree but it is very good otherwise. 

The reason for high oil prices - speculation? One should ask where do these speculators get the money from - there's supposed to be a 'credit-crunch' on with asset-price deflation across the board and tighter lending from banks generally.

You're missing the 'real' reason I feel. It's not speculation per se as the root cause, it's inflation of the supply of money - basically printing money.

As JJBoxster has said housing in the US and UK is a bust for investors. Their multi-trillion losses in worthless mortgage-backed securities have been dumped with taxpayers via the central banks of the US and UK as collateral in return for US Treasuries and UK Gilts - i.e. brand new hard cash!

This as JJBoxster has also said is not going into the busted mortgage market, i.e. lowering of mortgage interest rates, it's going into loans to investors(often part of the bank doing the loaning) to invest in commodity investment vehicles, oil, cereals, metals, but not gold whose price is politically managed, kept down.

Don't believe this Credit Crunch nonsense. Yes there's the mother of all credit retractions for Joe Public, i.e. motgages are as scarce as hens teeth, but in overall terms what is truly happening is a splurge in money supply growth to ensure the major banks do not go bust. The US and UK M3 money supply is growing currently at an unprecedented 20% p..a. That's hyperinflationary. Monetary inflation always leads eventually, 6-12 month typical lag, to price inflation. The US and UK embarked on serious money printing for the failing banks last summer 2007. We are only now beginning to feel the true effects of all these extra dollars and pounds looking for a suitably high investment return. You, Joe Public, unless there's any Rothschilds who regularly read A/Car forums, are being screwed twice over. The value of any savings you have in pounds are being devalued perceptibly each day by runaway monetary inflation. At 20% money supply growth a pound on deposit start of this year will be worth 80p by the end of the year. Plus the price of necessities, food, fuel, electricity, gas, taxes are rocketing due to this surplus printed money being diverted into these necessities of life, chasing a return for their hedge fund owners.

Having said all that there are subtle but important differences between how the US/UK has managed this housing bust compared to the European Central Bank. Unlike the Fed and the Bank of England, the ECB has resisted slashing the central bank rate. So far the Euro-zone looks better placed to bear the 'crunch' due to a stronger currency, cushioning the rise of oil in dollars and so on. It was remarkable listening to the BBC's Economics editor, Robert Peston, interviewing the ECB President, Claude Trichet, this morning and he, Peston, talking about the goal of 'stable inflation' whilst Trichet was talking about 'stable prices'. Note the difference. In the UK inflation is now 'baked in' as they say, meaning get ready for even more devaluation of your savings and accelerating prices. The ECB still believes in squeezing out inflation altogether through tight monetary policy, even if it means lower or negative growth for many Eurozone countries. In the long run they are right. It was also remarkable the comment of some other BBC economics journo on Radio4 this morning asking the BBC's leading female economics reporter, Stephanie Flanders, if she thought the banks were 'happy', after receiving £50bn of taxpayers money to help pay for their self-incurred losses. Has this country and its people gone collectively mad? 'Happy' banks? They're private businesses, who invariably make monstrous profits, and should be let go bankrupt and shreholders broke when they make bad bets in the casino that is the City of London.

True Loather. That's why Bankrupt Brown went to the US two weeks ago. It was specifically to ask the US to loosen/free up more cash/capital onto the markets.

The Northern Rock fiasco continues unabated as Brown has got an 'exemption' to the Freedom of Information Act so nobody can see what's been going on there. This is a badly managed bank not a matter of national security. It's a colossal scandal.

I've always felt as though we are all, in some way, manipulated by clandestine forces making a quick buck on other peoples misery.

It's almost as if the 'Credit Crunch' (I hate media buzz words.) has been manufactured by some outside high ranking executives unstablizing the markets by the slightest suggestion of a problem. A problem manufactured by them in the first place.

How could we have got so far into debt without some hint of a credit problem by the professionals?

As for oil products, they will get their just deserts soon enough, as Nobby, Chalky, Ginge and I plan a direct assault on Oil production in the Middle East. The hardest part has been the planning as it's difficult to gain intelligence on Oil production sites, but many Middle Easterners are, like we Westerners, are easy to bribe, coerce and blackmail into supplying the technical details and employee personnel files.

Then, after a series small attacks that would initially appear to be accidents, we will bring in the heavy artillary, blaming unpopular local groups, hostile reactionery groups (like New Labour). These groups will be intent on defending and countering other groups and being supplied with weapons of medium destruction to destablize the local economies causing a massive backlash from the local authorities, causing a public outcry. Then the UN send in the troops with a massive backing from the USA, UK and their newly re-established Imperial Forces revigorated from their successful European Union takeover campaign, (Details at a later date).

We plan to bring world oil production to a halt by 2013, should all go well. Then it's back to the Mess for eggs, bacon and Hendricks Gin all round! Hurrah!!!

If it all fails...it was Ginge's fault.

Stephen - weapons of medium destruction. Made me chuckle that one ;-)

If your dastardly plan works you won't only be bringing the oil industry to a halt but the planet too. Everything moves, until further notice, on that amazing dirty black stuff.

And as you're ex-SAS (you don't have to say, I can tell;) you'd know you don't plan to go in until you know for sure how to get out. So if the oils dried up your BLT sandwich and Gin chaser is a gonner!

So stay at home mate, enjoy lifes little pleasures and use the web to invest in the Oil market to drive up the Barrel price to $150 while you watch 'green' Nu Labour squirm in increasing pain as people in Blighty get more and more wound up at 300% tax on fuel - Truckers protest in London coming but Labour CANNOT reduce fuel taxes, they're bankrupt and facing a 2nd civilian protest in 2yrs because they need every penny out of motorists wallets.

Labour have no reserves - the cupboard isn't only emtpy it's got huge credit card debts in it and IOU's. And bankrupt Brown has just raised an extra £2.5bn this week because he had to back track on his attempted hiest of 10p tax off the poor. So sit back, watch the Oil price climb and Labours blood pressure too as motorists and truckers get very, very angry. Can you hear the pips squeeking in the Kremlin, sorry Westminster?

Then Bankrupt Brown's "I'm a safe pair of hands" will be shown for what it is. He'll have to admit he can't reduce fuel tax because "I'm Bankrupt". The actual TRUTH as apoosed to a smarmy lie from a British politician in 15yrs of Nu Labour. Long time coming. The Election won't be so long after that though :-)

JJ(Boxster), note the media are doing everything in their power to blame OPEC for the incessant, ruinous oil price rise. They major on Gordon Brown talking tough with OPEC and particularly the Saudis to 'turn the taps on'. The BBC, or the Bloated Brainwashing Communists, are particularly offensive in this regard.

Do they, the mainstream media lackeys and traitors, not realise that intelligent people have long since used the internet to educate and inform themselves as to what is really going on in the world and who is behind it. Most people know that OPEC is not the OPEC of the 1970s and Sheikh Yamani and near monopoly of oil production. OPEC is only 40% of total production currently. Oil supply is not out of kilter with demand. American demand for gasoline is falling due to recession. The real powers in the world, the small group of astronomically rich, interlinked families, the ones behind the US Federal Reserve private bank and most all central banks in the world, have pulled the plug on the housing pyramid scheme and stepped into oil speculation and food. It's as simple as that. The mainstream media(owned 95%+ by the same entities)'s job is to cover up and lie about the real reason for the hyperinflation of oil, fuel and food  prices, just like they did about the fairytale of a new economic paradigm and no more boom and bust in the late nineties to 2007 when they sucked everyone into the housing pyramid scheme with the mantra of 'ever-rising house prices', before crashing that too. Don't believe it? Goldman Sachs were betting on the collapse of mortgage-backed securities from early 2007, long before the official sub-prime problem surfaced in August 2007 with Bear Stearns's funds blowing up. Goldmans made at least $3 billion on 'guessing' correctly this bet, whilst at the same time still peddling worthless, toxic MBSs to European banks primarily, like UBS, before the brown-stuff hit the fan. Note it is Goldman Sachs again foremost who are 'forecasting' a $200 oil barrel. Neat trick huh? 'Forecast' something, pile everyone's investments in, then be the first to short the price - just like housing all over again. When will people ever wise up to these bastards?

Loather - I'm with you all the way on the 'deflection' by politicians in the West, including Britains bankrupts, on the production level at OPEC. It's crystal clear OPEC are meeting demand perfectly well and there's absolutely no shortage of supply in the market in fact reserves are healthy too.

So what Bankrupt Brown is actually asking OPEC to do is increase supply ABOVE demand to drive down the Oil price!! Why would OPEC want do this (drive down their price for no reason!!). The polticians are asking businessmen to behave like lemmings - to behave as stupidly as politicians with the markets and 'play God' or politics with energy - l don't think so!

And the colossal global hypocracy is Brown is asking for an INCREASE in hydrocarbon production (oil) when we all thought Govt policy was to strangle hydrocarbon use!!! This is a "safe pair of hands" is it? Did he get his book on Business & Economics from a clown shop?

Just demonstrates once again why politicians should NOT be allowed to interfere with markets. That's how the British Govt lost £££billions of our public money on £Sterling pompously trying to 'manufacture' a high (false) price. They got slaughtered. Politicians are total losers playing with markets.  

I'm not with you on Goldman Sachs. They're not so clever (their share price has dropped 15% over the past 8 months) and have lost money as have all the other global investment banking and securities firms. Yes there's a lot of market manipulation 'attempted' but I think you'll find most Banks and international finance houses are all up sh*t creek at the moment!

My focus though is watching Labour sink into the hole its dug itself and the country. I hope the truckers tip the motorists into mass protests too to expose Labours lies about running the economy prudently. 

They're stupid mantra about 'inflation, inflation, inflation' misses the colossal figures of balance of trade, consumer spending and debt, and government spending and debt all of which have been looking grim for a decade under Labour while they mangle our energy market.

So Labour can't reduce petrol taxes because they're bankrupt (we're bankrupt!) despite a 1,000 new taxes to fund the growth in Politburo obesity and cronies. And they need every CO2 and fuel tax penny from motorists pockets to keep their obesity afloat - no thought of diets here and providing efficient effective public services. But Labour have announced their first public money saving in 15 long years - a £1.20 saving on new lower 20mph urban speed limit signs which will increase congestion, pollution and reduce fuel consumption - we're ok then!

It's all teetering on the edge of a barrel of oil - incredibly ironic isn't it? 

If you think prices are high now think again.

I have just returned from a presentation given by "Agri Energy" who have bought up and now own most of the major Waste collection business' for used cooking oil (UCO) in the UK.

Got talking to their CEO who gladly explained that they are getting into Bio-diesel production through UCO collection. They are building a 100,000 tonne production site near the Stanlow Oil refinery. He also openly said that due to EU legislation we will all be paying a premium for the Bio-diesel part of the blend in our fuel at the pumps. Now the EU have agreed that by 2012 we should all have something like 15% bio-fuel blended into our fossil fuel.

Thought this might cheer you up.

Jon, regarding 100,000 tonne recycled cooking oil facility. This is small beer compared to the 21 million tonnes of diesel sold last year, less than 0.5%.  http://www.energyinst.org.uk/content/files/mr134.pdf

Regarding EU's desire/directive for 15% biofuel by 2012, this has already hit a snag in Germany, where the government desperate to prove their Global Warming Believers/Green credentials jumped the gun and announced a mandatory 10% biofuel content from start 2009. Unfortunately, couple of weeks back they had to withdraw the legislation as motoring organisations and others in Germany proved that as many as 3 million cars could not take the petrol/bioethanol E10 mix without damage to the fuel pump, injectors, pipes and so on by the corrosive ethanol content. Recent highlighting of the adverse effect on food availability and prices for the world's poorest seems to have put the kybosh on this whole nonsense.