Oil Fundamentals

Whilst oil is seemingly determined to fall back below $60 a barrel everytime it rises above that level, the fundamentals are still unaffected. So, after hedge funds and speculators took a profit with a large futures sell off during September, has anything really changed? Well - yes and no.

Yes, because we have seen some unseasonaly warm weather, a damp squib of a hurricane season and therefore, increasing amounts of spare capacity. In theory we could see more and more production capacity increases, and thus more and more oil, leading to the price falling further. There is also a reasonable chance of a US recession in 2007, what affect that would have on demand is unknown, but would almost certainly ease demand.

But what about geopolitical worries? Whilst the Lebanon-Israel war has ended - for now, the Iran crisis has hardly eased off, and North Korea has detonated, however small, a nuclear weapon. The geopolitical optimism sweeping the markets seems a tad strange.

Nonetheless, I am convinced that these factors, relating to the short-term trends and speculation of the oil price, are simply an aside to the most important factor driving the oil megatrend, China. Exhibit one is this graph, showing World Oil Demand:


The 2001 recession doesn't seem to have led to a large reduction in total oil demand. And if we are seeing a reduction in US demand, China doesn't seem to be reducing its oil demand. The latest figures for Chinese oil imports show a 24% increase in oil imports in September alone.

I'm not a speculator, the only shares I have are buy and hold jobs which I am probably overattached to, to ever be succesful as a trader. But, long termism has its benefits. The fact is the oil price is in a long-term trend, and this outlook points towards continuing inflationary pressure, and, eventually, $80+ oil.

100 Posts

This is the 100th post on this blog. That's including my early posts, even though they were rather spurious and infrequent to say the least! Posting frequency has also slowed down a bit recently, a fact of which I am all to aware. One or two of my recent posts have been 5-10 minute jobs, and therefore, probably not of the same quality of my early posts. For this I can only apologise.

The thing is, when you start a blog, or in my case when you get a second blogging wind, the subjects seem to roll into your head at will. The fire in your belly is only placated by switching on your computer. Recently, however, I have been wondering if I am suffering from a well-known disease, as those ideas have seemingly dried up, like a desert river.

But the facts remain the same. The same subjects are still important. The economy is still teetering on the brink of a nasty piece of turbulence. The immigration debate is still so one-sided it's sickening. I watched Question Time on Thursday and had to switch it off, especially when the smug Ashdown was talking. The text page, where they receive SMS's from the public is pretty revealing of the type of people who watch QT:

Text: We desperately need immigrants. They keep wages low.
Shirley, London

Text: We need Poles because half of our country is too lazy to work.
Dennis, Wigan

Well at least Shirley is honest, unlike ITN's Tom Bradby who reckons that there is 'no evidence of immigration affecting the Labour market'. Yeah right. But, who is the 'we' Shirley is talking about? As for 'Dennis', well he probably employs many Poles and makes a nice profit from paying them pitiful wages. Either that or he's a moron, you decide.

And then there's debt. Like all the Anglo nations we just love debt. Even our Chancellor get's in on the show with his record borrowing. And like the Chancellor, people are wracking up the debt with no intention of paying. Of course, with wages not rising for the vast majority of people (with one big exception), they need to keep borrowing to maintain a lifestyle they believe they are entitled to. Which is where I come in with cautionary advice, 'there's no such thing as a free lunch', I say. The people, however, don't or won't listen. They still reach for their credit cards; they cheer spiralling house prices; and they reach for their get out of jail free card, otherwise known as an IVA. IVA's are up 153% from last year, by the way.

I caution against these things and my other bug bears like energy dependence, inflation and the uselessness of multiculturalism because I am a decidedly old school conservative. George Oborne would never say 'there's no such thing as a free lunch', and no modern Tory would talk about 'a strong Pound'. They are engaged in realpolitik, I suppose. But, this is the reason why I, and every small 'c' conservative, needs to blog. We all have our niches and differences, unlike the popinjays on the left. But we also know that true conservatism will not die. And that when, as it must, the House of Cards comes tumbling down, people always return to cherishing the very things that we stand for - thrift, family and community.

Phillips on The Veil

So, Trevor Phillips reckons the veil row could trigger a 'grim spiral that produced riots in the north of England five years ago'. Sadly, yet another example of don't question Islam, or else. Muslims push and push for more and more, then when there beliefs are questioned, the spectre of 'damaged community relations' and attacked Muslims, raises its head.

But who is really to blame for keeping this row going? Yes, Jack Straw originally brought the subject up, but Aishah Azmi has to take the blame for keeping the media in material for the past few weeks. And, what about those (strange?) bedfellows who have seeked to profit from the Muslim vote, in this row? Yes, I'm talking about him and him.

Another poser.

So, who are this lot?

Is it a picture from a diversity training manual? No. Give up? Well it's obvious dear readers, this is the 'Welsh', according to Plaid Cymru.

Of course, Wales is nearly 98% white, but Plaid continue to be pointlessly obsessed with diversity. What's ironic about all this is that if Plaid took more of an interest in the majority population, they wouldn't actually have to ask what the Welsh want!

But, let us come to this question and the responses given by the contributors. What does Wales want? Well a new football team would be nice! But, jesting aside, the contributors to the site show that there are many Welsh people who have a far greater understanding of the problems facing Wales, than their alleged 'party'. And, unsurprisingly, Eid festivals are not at the top of the list.

There are numerous posts referring to Plaid's frankly futile quest to move further and further to the left. The reason for that policy is simple. Their 1999 election results, in which they made significant gains in Labour heartlands, went to their heads. More socialism is the key to victory, was their erroneous conclusion. Recently, those ex-Labour votes, have evaporated, and Plaid has been left with egg on its face.

So, there are two paths avaliable to Plaid. A new one, which consists of moderation, nationalism, capitalism, alternative energy generation, the return of industry and the current population put first. The other, current one, consists of more socialism, anti-Englishness, multiculturalism, EU aid, rampant welfarism, massive public sector spending and endless 'regeneration projects', which are useless without high-quality industry.

Of course, they will continue to follow the second path and they will continue to be soundly beaten by Labour, after all isn't that what the Welsh are supposed to do - lose and lament?

Today's Question

Can I trump my last post, with even more asylum madness? You bet!

A 7ft 2ins Pakistani woman is to live in Britain on benefits after claiming asylum because she is 'too tall' to return home.

Zainab Bibi, 33, claims she faces constant persecution and ridicule in her own country over her height. She has lodged an asylum claim with the Home Office and has already been granted a two-year visa to remain in the UK.

Miss Bibi, who in 2003 held the title of tallest woman in the world, plans to live off benefits and take advantage of free NHS healthcare.

Last night critics branded the immigration system a 'laughing stock' and called for tougher restrictions on asylum applications.

Philip Davies, Conservative MP for Shipley, said: "It shows what a soft touch people think we are. You couldn't believe someone could think this was a good enough reason to stay."

He said: "Anyone thinks they can get in. Will we start getting applications from people because they are too short, fat or thin? When the two years are up, even if she is refused asylum, I'd like to bet she'll slip off the radar and remain here anyway."

Miss Bibi lodged her application for asylum claiming she was repeatedly attacked in her home town near Faisalabad, Pakistan. She said youths in her home town of Toba Tek Singh threw stones and rocks at her and often pulled at her clothing.

Miss Bibi says one man hit her with a stick breaking her wrist and now she is too afraid to return to her home country for fear of further attacks.

The 7ft 2in woman has used her enormous height to earn money in the past making dozens of public appearances both in her own country and abroad. Earlier this year she was hired by American ice cream giant Baskin-Robbins to undertake special promotional work in Britain.

She spent 15 days handing out ice creams on behalf of the company but claims she is unable to work full-time because she suffers from diabetes.

Miss Bibi said a major appeal of living in Britain is that she can receive free NHS treatment instead of paying for costing private care in Pakistan.

After flying in from Pakistan, she clamed asylum in June and was given a council flat in Stockport, Greater Manchester, where she pays no rent or council tax and receives £40 a week in benefits.

Speaking through an interpreter, she said: "I like it very much in Britain. You are kind here. People smile at me and I have no problem.

Aye, she had such a tough time, what with all those parties she had to attend as a Pakistani celebrity.

And, to think that people still wonder why there are NHS deficits?!

Black Americans Claim Asylum

From The Sun:

Britain is seen as such a soft touch that poor people from countries such as America are even coming here now.

'A couple of years ago I met two black guys from the States who were over here because they thought they could get a better standard of living.

One was from Ohio and the other from Kansas. They claimed asylum because they said they were racially discriminated against at home.

But they freely admitted they were here for the free healthcare and accommodation. It is an absolute joke.

They could have been here for up to five years before their application was processed.'

Last night the Home Office admitted five American nationals have claimed asylum this year alone.

Saving the Planet, or Taxing the Poor?

Martin Clarke has posted 10 ways to save our planet, on his blog. There are a couple on there which probably wouldn't make much difference at all and I have a couple of suggestions myself, too. On of them would be the 'China factor'; it has to be remembered that this is a country where numerous Coal fired power stations are added every week. And western companies' factories are allowed to pursue environmental practices which would not be tolerated in the US/EU. Nonetheless, there are some excellent points raised:

1) Streetlights, why do we need a street light every 10 yards? Take the roundabout at East Street Sittingbourne, it has a multitude of lights on the central reservation, lights around the outside and then the footpaths have yet another set of lights. Do we really need the streets to be lit up like daylight? For those who argue (wrongly I might suggest) that they are there for safety reasons, why are the streets still lit up at 2,3,4,5 in the morning? How much electricity this would save? The problem is the government would lose VAT.
2) Why do we import Fruit and Vegetables into the UK when some are grown in abundance locally, think of the environmental damage caused by shipping apples etc form South Africa, Australia
3) Why do we need plastic bags in Supermarkets surely paper would and what about encouraging shoppers to bring their own, this was the norm 30 years ago
4) Why so much packaging. Instead of polystyrene why not use paper or cardboard which can be rotted down.
5) Why not use vegetable oil as fuel instead of Petroleum oil?
6) If the government want us preserve the environment they should give us Solar Panels but then again how much tax would they lose electric sale.
7) Instead of importing so much food why not encourages the public to eat seasonally i.e. only eat fruit when it is cropped.
8) Surely the jaunts MP’s and ministers who travel all over the World can be curtailed look at the damage there travelling does to the environment. Most of there work can be done via the Internet and conference calls.
9) The European Union apart from being the most corrupt and inefficient organisation in the world, there Parliament causes a great deal of pollution for example once a year the whole EU parliament moves from Brussels to Strasbourg how much pollution does that create?
10) Why not give us grants to sink large tanks into the ground for those of us who have gardens, rain and wastewater could be collected. With this we could flush our toilets, water our garden etc, with a filter system we could even wash our car?

Numbers 2 & 7 are related, and in fact are probably also related to the 'China factor' I was talking about previously. The solution is blindingly obvious - an environmental tariff. The environmental cost of this is massive and yet rarely discussed. For instance, it always makes me cringe when I hear people pontificating about the environment and low-cost airlines, I work at an airport and see people cramming onto a A320 or 737, then I look over at the cargo section and see huge 747's bringing food and Chinese goods into Britain. It's obvious which of the two is the most damaging.

Number 5 is a bit more complicated. But, what I will say is that simply changing from Petrol to Diesel engines, would be a huge step in the right direction. That's not to say that we should dismiss Biofuels, infact I am a huge fan of Biomass technology as I believe it will help the agricultural sector of this country. Of course, this is still a developing sector, but we are only a few years away from seeing biofuels at the pump.

What I think you can gather from this post, and many similar ones is that all in all the debate is moving in the right direction. It's just politicians who are stuck in a rut. The Lib Dems can only think of Taxes, New Labour taxes and Nuclear Power and as for the Conservatives, well, nothing of any note so far, but I would expect taxes to involved somewhere. In my experience people willl take on environmental issues and they will change certain aspects of their lifestyles. The current thinking of we the Politicians, will deal with the environment alone, is at the heart of why there will be plenty of talk but no action on the environment.

Cameron - My verdict.

The opinions on David Cameron following the Tory conference, have been mixed. In fact, the word 'underwhelming' comes to mind. Nonetheless, there is still a feeling amongst the Conservative Party faithful that they are on to a winner, and will defeat a Gordon Brown led Labour party, at the next election.

A prime example of this is the talented young blogger, Sam Tarran. In a post titled 'The Future's Bright - The Future's Blue', he enthuses about the Cameron revolution. And, he firmly believes that Cameron will sweep the Conservatives to power at the next general election. I, however, do not. The simple fact is that Cameron is there for the taking, and Labour know that.

Cameron's poll lead was blown out of proportion due to the unpopularity of Blair and the Blair/Brown feud. The fact the Conservatives haven'’t had such a lead since the 80s made it all the more impressive. But, with peace temporarily restored in the Labour party, and with Tony Blair's saccharine speech receiving over the top plaudits, the large lead has now disappeared.

As I said, the current thinking within the Conservative Party is fairly confident. The widely held belief is that when the election comes, and with the parties so close together on policies, it will simply be an '‘image contest'’ between Cameron and Brown. Obviously, such a contest would see an emphatic win for Cameron.

However, the stage is now set for the final Gordon Brown budget. A budget that will be marked by three words, Panem et Circensis. Bread and circuses. Brown's pre-election budget was a masterpiece of bribery. As much as it will probably pain him, Brown will offer up a veritable raft of goodies. And, as he has seen the popular reaction to abolishing income tax on soldiers fighting abroad, more than likely he will purloin that as well.

On the back of these promises, Gordon Brown will be the next PM. Promises and bribes will triumph over image. And, with four election defeats behind them, the Conservatives will probably split. Sadly, that is how I see events unfolding. I just hope that it'’s the pessimism within me that sees the horizon looking so bleak. And, that I will be proved wrong - again.

Headlining

Surely this headline would have been more appropriate on May the 2nd, 1997?

The Liberal Mind = diseased

Martin Kelly has a link to a particulary risible Guardian article, on his blog. Now, notwithstanding the poor quality of the aforementioned article, I had a read through the comment section. The messages left on this section are perhaps the most enlightening evidence of the diseased mind within the liberal left.

The first message to catch my eye was from someone under the moniker of bibamejico:

Cultural racism is far from being acknowledged in the UK, there are "innocent" ignorants who don't see racism and practicing believing racists and between them a whole range of other types and levels of racist.

I don't know why so many white people find it difficult to notice that racism is an everyday, everywhere occurence in the UK and elsewhere.

Having a black friend or two (which most whites don't) is not a sure sign of a cleansed soul .... perhaps having a black spouse/partner and some black kids is.

So you see, without black friends or children you are an 'unwitting' racist. Surely such stupidity could not be bettered? Of course it can squire, this is The Guardian:

CameronFan is what we in the U.S. call a piece of garbage White trash scum. Could you please send this worm to Basra so that some Iraqi marksman can enjoy the well-deserved right to put a bullet right between his eyes? Make the world a better place for our children: if you spot White trash scum, spit in their face.

How long would it take for the Guardian to delete a message from someone who talked about Black trash scum?

Admittedly the quality of the comments does increase markedly after that, but such logical arguments are lost on the minds of liberals, particulary a frequent commoronentator called damnlies:

so much bile in these comments...this is a sick country breeding some sick minds...racism is just a part of it...

A bad case of Psychological projection there. And, there's even time for the famous non sequitur to be trotted out:

BRITIAN COLONISED THE WORLD FOR CENTURIES, NOW THE WORLD IS COLONISING YOU BACK. live with it.

Unbelievable. Liberalism is a diseased idealogy, rotten to the core. And hopefully, one day, the whole edifice will collapse on liberals unworthy heads.