Chart of the Day - Wednesday 19th December 2007

I'm publishing this chart as a reference, nicely closing the regional oil market for 2007.

The record petrol prices in Australia and New Zealand over the last few weeks are the result of Asian unleaded prices reaching AUD$118/barrel, which is itself a function of the international crude oil price and regional influences (which pushed TAPIS over US$100 on a few occasions), plus the refining margin and variation in exchange rates. As local currencies have fallen over the last few days, the price we pay for oil and oil products has risen even as the international oil price weakens.



When you see this chart at the AIP website push through AUD$118/barrel, you can expect pump prices to touch new records a week or so later. Given that prices are back close to that mark now, we can expect retail prices to be very high through the Christmas break and as people head away on holidays. Look out for a few newspaper columns crying foul over oil company corruption and 'holiday pricing'.

The obvious solution is to go everywhere in solar powered public transport.

Yeah, but someone will still figure out a way to raise the fares during the holidays arguing something about supply and demand...I think we should just ban the holidays and stay home.

It might be appropriate, at this point, to compare exchange rates to a basket of currencies/commodities - both the Euro and the US Dollar are highly unstable right now, moving in opposite directions. Any opinions on a stable index which which to measure Australian and other currency fluctuations?

As a sidenote: the discussion in the Transit Oriented Development post is still going strong four days later.

It might be appropriate, at this point, to compare exchange rates to a basket of currencies/commodities - both the Euro and the US Dollar are highly unstable right now, moving in opposite directions. Any opinions on a stable index which which to measure Australian and other currency fluctuations?

This is one of the more interesting aspects of this years petrol prices here in OZ. Last year we had higher petrol prices, at least here in Albury Wodonga, even though oil prices only got to US$78 bbl. This year with oil sitting at $90+ we a re still holding to A$1.40 a litre, slightly lower than last years highs of $1.46.

Does anyone know of a source of historical oil price data that can be corelated to the movement of the AUD against the US. I am happy to produce the chart if you send me the data?

Try this

http://www.rba.gov.au/Statistics/HistoricalExchangeRates/index.html

Also note crack spread on oil to unleaded has narrowed than in the past.

Cheers

The dynamics of the oil market are indeed fascinating and with increasing volatility in oil prices comes additional attention from the media and the community who, for the most part, are not yet prepared to see the reality of the bigger picture that is Peak Oil.

Sure, the interplay of exchange rates, supply & demand, speculation, market sentiment on geopolitical tensions & events, the perception of OPEC capacity, right through to storm activity in oil producing provinces all play a central role in the price we play at the pump. But, the reality of this clouds the menace hidden within the underlying nature of a generally well supplied oil market; A flattening world oil production quota on the back of increasing demand by China and oil producing countries themselves. Not to mention the increasing depletion on the other side of the plateau so adeptly described by Hubbert's Linearisation.

And still there is no consensus of understanding or appreciation within the wider media or community of what it will mean to enter into a time of reducing oil production and the fundamental limits to economic growth (as we understand it today).

For those of us who fully accept our predicament, it's really up to us to affect change and to educate others. I think Phil, you have done, and are doing this very effectively.

I'm reminded by a Ralf Waldo Emerson essay when he wrote:

"...And we are now men, and must accept in the highest mind the same transcendent destiny; and not minors and invalids in a protected corner, not cowards fleeing before a revolution, but guides, redeemers, and benefactors, obeying the Almighty effort, and advancing on Chaos and the Dark."

Phil

One point that is pertinent is the spread on diesel to Tapis.

The second is how Tapis and WTI spread has opened up again.
97.36 vs 89.90 as at 9:50GMT

http://www.upstreamonline.com/market_data/?id=markets_crude

Dave B

it'll have to top a $1.50/l before anyone cries out too loudly and then we'll get used to it! i reckon it will have to go a lot higher before people start changing their holiday arrangements.

oonce, first I must say that i ahve a strong affection for Australia having spent most of 1970 -71 being young in your country. There are some similarities between you and Canada as well, even tho you are mostly hot desert and we are mostly cold desert. While holiday travel is discretionary I think we need to focus on the daily business oriented travel for indications that things are changing. In the greater Toronto area we have huge commutter road traffic and much of the design is typical vehicle oriented. However governments are beginning to invest in transit on a regional scale. It wont help those of us in the exburbs but is a subtle change. However I don't think most people will switch from personal vehicles until we suffer on the income side, not the cost side. Unfortunately, and I mean that seriously, this suffering seems to be scheduled to begin in a few months.
All the best for rain in the Murray!
Don