Karl is as happy as the next guy with the drop in the price of oil, but he warns that you probably shouldn’t start celebrating just yet...
It may sound a bit mean, but I always find it intriguing watching file footage of stock market reports. More so when the market’s had a tough day and the images are of men burying their heads in their hands, or staring at screens in disbelief.
There’s something quite unbalanced about the fact that there’s champagne bottles popped when the market goes up, but blank stares and tears when the market goes down. The share market is so volatile, it’s hardly surprising to see huge ups and downs – so why the depressed faces when money’s lost? It’ll come back again at some point. Always will, always does. It’s how long you’re in it for that makes the difference.
But there’s one price drop that no-one saw coming – the massive fall in the price of oil.
We’ve been told for years that oil is running out. Fossil fuels are a finite resource, and even I’ve fallen trap to the predictions of how long we have until it’s gone. But with shale oil and massive increases in production from the Middle East, it seems that it’s going to go on for a long while yet. In the meantime, we – the motoring public – are the ones who are winning.
Those in the Middle East are none too pleased that the US is creating its own oil reserves and are trying to see how low they can go before the US oil is priced below production costs. When that happens, the oil price will go back up. But the US isn’t giving up and the current low costs means those with a penchant for dino-juice can keep on swigging away.
Electric cars suddenly look very silly. Diesels are still too expensive, and petrol engines with turbochargers are getting more and more efficient. The new Audi A4, for example, has a petrol engine that consumes just 5.3L/100km. Staggering stuff.
Is it even worth thinking about a hybrid or hypermiling oil-burner with those figures? Perhaps. What’s interesting is that the potential for another 1970s oil price spike is brewing in the background. If one of the major producers has a disruption
or if they can’t sustain the increased production, the oil price is set to rise. It’s a powder keg situation, and one that’ll have the Wall Street boys on edge as soon as it shows a hint of a dead cat bounce.
So, should Tesla be excited? Not just yet. We all know that oil has a limited future, and the volatility is such that we’re going to have to ride it out. Anyone with an efficient petrol will still be in front, even when fuel costs begin to rise. But perhaps storing some fuel long term may help, especially while prices are low.
But fuel goes off, right? Look up a product called Sta-Bil. Lots of people use it to keep petrol fresh for a couple of years. Doomsday preppers love the stuff, but apart from being slightly mentally questionable, they’ve got the right product for the job.
As the old saying goes, put some aside for a rainy day. The boys watching the screens will tell you, there are some dark clouds on the horizon.
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