With the price of a barrel of oil today at $68.49 a barrel Oil prices are around half what they were in July this year, when they hit a record price of over $147 a barrel.
We will find a small feature on page 2 or 3 but why hasn’t this hit the headlines? Why aren’t the media shouting about this as they are shouting about the “Financial Crisis”?
A drop in the Oil price is just the positive news we need right now as it is more than just a “feel good” factor, it is a major contributor to helping the economy move again. Fuel is needed to transport “goods to market” and for consumers to drive their cars to go and shop for the “goods” they need. Even in an economic downturn there is no alternative to trucks and cars on the road, it is the cost of using these vehicles that is significant.
Asda and Morrisons in the UK have responded and brought the price of petrol down to under the “magic” £1. per litre at 99.9p per litre. What about the rest? More needs to be done; there is a 50% difference between the price of a barrel of oil in July and the price today. This dramatic price cut in the wholesale market has not been reflected in the price the consumer pays at the pump. The Oil Companies will have you believe that they “buy ahead” or that “it takes time for price cuts to filter though” or some other such line, the truth of the matter is that “someone” is profiteering here. Unless Gordon Brown and the government take firmer action to insist or to force the Oil Companies to slash prices at the pump there will continue to be just be the slow trickle of a response that we have seen so far.
On Wednesday, US economic data showed that retail sales fell 1.2% in September, a sign that consumers were tightening their belts – but they still need to put “gasoline”
Also the US central bank's Beige Book report, which reflects the economic conditions, said the economy had showed further signs of contraction, fanning fears that the US economy is already in a recession - but they still need to put “gasoline”
Some pundits expect OPEC to cut production when it next meets in November, maybe they will – but this still does not get away from the fact that the wholesale market price is 50% lower now than it was 4 months ago and this saving has not yet been passed on to the consumer with the retail pump price only dropping a few pence. The price of the barrel of oil is lower now than at any time in the last 14 months, we need the media to help, we need the media to be shouting this out from the headlines, not burying it on the inside pages.
