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37 comments on British MP interviews David Strahan, author "The Last Oil Shock"

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andytk on July 17, 2007 - 3:16pm Permalink | Subthread | Parent | Comments top

someone said oil may go to $100 plus per barrel, and I asked, would anybody but us energy fanatics even notice?

I've said a few times that with Europe's large fuel taxes we wouldn't even notice $100 barrel oil.

The demand destruction will come from America first. Large engines plus volatile fuel prices (in % swing terms) mean large exposure...

Andy

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Valuethinker on July 22, 2007 - 8:09am Permalink | Subthread | Parent | Comments top

No that's incorrect:

1. transport fuel *used for trucks and cars but not planes* is highly taxed in Europe. Aviation would be hit hard by a 1/3rd rise in fuel costs.

2. some kinds of fuel (farmers, possibly trains) are tax reduced or exempt. Again the proportionate impact would be large.

3. non transport uses for oil would be hit (chemicals, fertilisers, electric power generation, lubricants etc.)

4. generally energy prices move with oil prices-- gas and coal as well. What happens is industrial consumers (who are often dual fuel) switch to gas, driving up demand for gas, and hence prices

5. oil is used for home heating purposes in a number of places in Europe

So the impact on Europe of $100/bl would be significant on the economy.

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