Why we should beware the dawn of cheap petrol _ paul stevens _ opinion _ the guardian

In the summer of 2014, as prices began to slide, Saudi Arabia reduced its output to balance the market, but soon it had a rethink. Gas finder Between 1980 and 1985 it reduced supply – from 10.5m to 2.5m barrels a day – to keep prices high, but suffered serious economic consequences. Gas x tablets himalaya So in September 2014, Saudi drew a proverbial line in the sand, deciding not to protect the price but to prioritise defence of its market share.

The conspiracy theorists had a field day: this was obviously a political attack targeted at Russia, at Iran, at Iraq, at the US, they said. Gas works park fireworks The reality was much simpler. Electricity generation by country Saudi Arabia aimed to marginalise the high-cost producers to the benefit of low-cost producers – like Saudi Arabia. E gaskell The fact that these high-cost producers were for the most part also American was purely coincidental.

How long can we stay here? That’s hard to predict, because this is such an unusual place to be. Gas utility worker An agreement was reached halfway through this month between Saudi Arabia, Russia, Venezuela and Qatar to limit their production, but this has no credibility whatsoever. Static electricity vocabulary words Russia has been involved in such deals before and has rapidly reneged on them. Electricity history timeline After a brief flurry of interest the markets correctly dismissed the deal, and oil prices have since resumed their downward trend. Npower gas price reduction Put into perspective, prices are low, but historically not that low. Bp gas prices nj Between 1986 and 2004, the price in real terms hovered around $33 a barrel compared with the average price last week of about $32.

However – and this is crucial – it is a much lower price compared with the last 10 years, when prices averaged $85 in real terms. Grade 6 electricity unit test It is trading at a price that few are accustomed to.

So what should you be thinking as you fill your tank? In short, that lower prices in the UK mean good and bad news. Kd 7 electricity socks You reap the benefit of the former; the price of petrol has fallen from about £1.40 a litre in 2011 to £1 and less in January this year. Electricity freedom system This is not as much as the fall in crude prices because of the fixed amount taken in tax. Gas unlimited houston texas Of the price of oil products to the final consumer in 2014, more than 60% went as tax to the UK government. K gas constant Nonetheless, lower prices put more money in consumers’ pockets with beneficial effects to the economy.

In the good old days, when financial markets had some understanding of economics, lower oil prices would have also boosted expectations for growth and pushed up share prices. Gas monkey live In today’s world of economic illiteracy and “ irrational exuberance”, this is no longer true. 93 gas near me Globally, falling oil prices are now seen as bad news for stock markets.

But there is more bad news in the price you are paying. Electricity vs gasoline These lower prices are having serious impacts on employment. 3 main gas laws The North Sea is not as important to the UK as in the early 1980s, when it generated £12bn for government revenues, compared with £4.7bn today. Electricity how it works Some 23,000 jobs are expected to go in the North Sea over the next five years and many will never come back as the workforce ages.

Facebook Twitter Pinterest ‘Production of shale oil in the US increased by almost 5m barrels a day between 2008 and 2015, unprecedented in the history of the industry,’ Photograph: Shuli Hallak/Corbis

Future British production is also in doubt. K electric company It will rely on existing platforms and pipelines, which are ageing and reaching their sell-by date, or investment in new infrastructure, which is unlikely to appear in this lower price world. Bad gas 6 weeks pregnant The industry body Oil and Gas UK has said that less than £1bn is likely to be spent on new projects this year, as opposed to the £8bn spent on average every year over the past five years. C gastronomie traiteur avis British oil that is not produced in the next five to 10 years may never be produced.

Think too of what it means around the world, for already there are dramatic reductions in investment in conventional oil production. Electricity water analogy animation In January the commercial intelligence analysts Wood Mackenzie estimated that $400bn of projects have been postponed or cancelled. Gas cap light This involves 68 that account for 27bn barrels of reserves, equivalent to the combined reserves of Norway, UK, Mexico and Oman.

Assuming oil demand continues to grow, as the consensus argues, this lack of investment is very serious for an industry where the natural depletion of oil fields requires producers to run to a stand still. Gas key staking tool Over the next decade it is possible we’ll have an ever-tightening market, leading to instability and the threat of price shocks. 76 gas station jobs There will be problems for large oil companies in this lower price world as their share values fall. Electricity song omd And if you wonder if this matters to you, just remember the pensioners who depend on stock market valuations for their pensions. Gas leak los angeles In February 2015, before the price collapse really started, oil firms accounted for more than 13% of the value of the FTSE 100 share index.

Another source of concern is what lower prices mean for the drive to replace fossil fuels and offset the march of climate change. Gas prices in texas 2015 Suddenly, renewables begin to look relatively more expensive, and this could undermine the progress made last year at the Paris climate change talks to reduce burning carbon.