The price of oil has hit a new record on the back of supply worries after bad weather hit Mexican oil exports.
US light, sweet crude oil rose 72 cents to $112.48 a barrel, above the previous record of $112.21. Brent crude rose 41 cents to $110.25 a barrel in London.
Bad weather led Mexico - a key supplier to the US - to close ports that deal with 80% of its oil exports.
More.
Oil price hits record high in Asian trade
NVDL: At some stage people have got to realise that when 'bad weather' starts to impact on how much a loaf of bread costs (and everything else obviously), but specifically the oil price, we are really in trouble. And now the last thing we can ask to play ball is the weather, as the Amazon is being burned faster than ever to grow Soy crops (very lucrative now for biofuels), and coal is becoming the alternative of choice for power generation, and incidentally, synthesising oil. Major ice shelves are crumbling in the Antarctic as we speak, whilst a few ice crystals survive on Kili. We are going to see an acceleration now in things going from bad to worse (across the spectrum - inflation, recession, failing economies, crime, food and fuel shortages). For additional insights on this topic, read James Kunstler's epic (though understated) book: The Long Emergency.
2 comments:
I can remember last year when people freaked out when the oil hit $70 a barrel
Unfortunately $110 is still cheap. I'm not exaggerating. Matt Simmons from an Energy Investment bank says we have gotten away with murder (paying very little for an incredibly precious and valuable resource). A fundamental shift is underway, and even corruption can't stop reality from seeping through. Simmons says $200 a barrell is more reasonable, and you can bet when there is a real shortage, when some governments have to go without, they will pay a lot to keep suburbia and their economies lubricated. Obviously some will not be able to afford these premiums and will rapidly form part of an alliance of economic losers.
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