Brent Crude Falls $3.74 to $103.54/bbl

[theheretic]

Brent crude fell on "surpluses" but mostly due to EU economic collapse and bank runs prompting futures to drop. Futures markets for crude are essentially betting that currency messes associated with Southern Europe dropping the Euro and Defaulting their debts will greatly reduce demand for crude oil, or rather the ability to pay for crude oil

Comments

[theheretic]

Presumably you've given thought to the consequences of southern Europe collapsing and the UK being forced to bail out the bad investments of France and Germany and most of those nations as they crash and burn in default. That should make for unstable Pounds and the exchange rate mess with the new currency markets will impoverish a lot of folks, to the point that a lot of UK institutions will fail along with the rest of Europe, at least temporarily. The unemployment problems in the UK, which conservatives and liberals both agree is a major handicap, and times will get worse for a while. I do think the basic UK citizen will be willing to do a Victory garden, and bicycle to work if they can find a job, even in the rain. They're tough like that and they've done it before. Its going to be tough to convince people that all those stories from their grandparents about how great everything was, and how good it was only 7 years ago, is over forever will be a tough pill to swallow. People here in the PRK do their Ostrich impression and only talk about inane "reality tv" not the news or the real world. I suspect much of the world is in denial.

Hubbert predicted the see-saw, didn't he? I think Kunstler just repeated the explanation. It all gets pretty complicated when you throw in currency exchange rates, but basically, yeah, this is what we expected more or less. Way back when, the idea of $200/bbl oil seemed plausible, but the closing of businesses and stagflation kind of ruined the whole thing. Sustainable algal biodiesel is $30/gal. Think about what that cost does to your food prices and transportation economy. I shudder, but then I start using a spreadsheet and do my best guesses. Throw in Trade Tariffs to block all Chinese goods, and the price goes up even more. Austerity, without any choice at all.

[ford_prefect42]

Just a couple points.

First, I don't really see this as a "seasaw", I visualize it as a rubber ball rolling down a stairway. Sometimes it bounces off the peak oil ceiling and drops fast, sometimes it bounces off the stimulus/collapse elsewhere/inertia floor, and rises for a while. But the thing is going to, ultimately, end up at the bottom f those stairs.

Second, The recent riots pretty much proved that he brits you're thinking of, the ones that took the blitz as all in a days work... Yeah, they don't exist anymore. Not that we yanks with our OWS are any better off, but, no, not seeing the good citizens of Great Britain freezing in the dark (particularly given the state of british coal and nuclear *shudder*) calmly.