Be very afraid of low oil prices, says motoring website

Friday 5 July 2013, 12:01PM
By Dog & Lemon Guide

High fuel prices mean the world’s economy is still alive, says review website editor Clive Matthew-Wilson says:

“Right now, petrol is still cheaper than some brands of bottled water. It’s not expensive when you consider how little oil is left and how hard it is to extract.”

“You should be very afraid of a dramatic fall in oil prices. That would mean that the world’s economy had dropped into deep recession. So, however crazy it sounds, we should be pleased that oil prices are so high. High oil prices keep nudging us towards alternatives to traffic jams, and high oil prices also mean that the world’s economy is still ticking over.”

“Higher fuel prices are caused by a combination of a high global demand and a limited global supply. It’s as simple as that. Yes, the oil companies are crooks, but they are merely exploiting the current situation. They didn’t create it.”

“As long as billions of motorists keep driving to work every morning, there’s going to be a shortage of fuel. The global supply is limited and it’s under constant threat due to instability in the Middle East.”

“It’s not a question of how much oil is in the ground, it’s a question of how much oil is immediately available. Right now the global demand for oil and the supply of oil are about equal – there’s no spare capacity. The slightest drop in supply – or even a threat of a drop in supply – will result in higher oil prices.”

“However, in the short term at least, high oil prices are far, far better than the alternative, which is a sudden collapse of the global economy.”

“Of course, if the oil prices rise too high, the world’s economy will collapse anyway. The prices we’re paying at the pump today may seem very cheap if things go bad in the Middle East.”