Blame Twitter for the increased oil prices
Oliver Lewis 4:46pm
The BBC are reporting that unleaded petrol has now reached 130p per litre and are
blaming Libya. I¹m not convinced. Libya only accounts for about 2.3 percent of global oil production and even now the Arabian Gulf Oil
Co¹s production in east Libya is around a third of normal levels.
The real cause of the current price increase seems to be Twitter and Facebook. The social networking sites are allowing protestors to organise uprisings with a sophistication and speed which have taken analysts completely by surprise. Increased oil prices are the market¹s response to all this uncertainty and the possibility of this revolutionary fervour spreading.
It's not unreasonable: after all, four of the top ten oil producing countries in the world are in the Middle East. The role of social networking is something which the highly-paid financial analyst hasn¹t been trained to deal with. This is a whole new type of revolution, there are no precedents or models and consequently the markets are over-reacting to events in the area. It¹s no coincidence that yesterday¹s news about further arrests in Iran was followed shortly by an increase in the price of oil futures.
So the real cost of these Twittered revolutions, for us, is an unpredictable, hyper-sensitive market. Is it a price worth paying for the freedom of the Arab people? I think so.
Previous
Ian Walker
March 2nd, 2011 5:09pm Report this comment...providing they end up free.
The UN, EU, Britain, anyone should be engaging diplomatically with the rebels and helping them set up effective democratic government institutions and constitutions, before another despot gets a foot in the door.
Maurice Cousins
March 2nd, 2011 5:18pm Report this commentIt's not the amount Libya produces that counts, it's the type. Libya produces light sweet crude that is commonly used in gasoline, making it extremely valuable. Other than Libya, Nigeria is the next best. As supplies become tight, demand rises, thus forcing up the price. Furthermore, the price is rising as people begin to stockpile oil in order to hedge against further rises.
Twitter has nothing to with it.
ATC
March 2nd, 2011 5:24pm Report this commentAny chance somebody from the Facebook or Twitter generation could tweet the British people free of the European Empire dictatorship? The rise in the price of oil would be worth it.
Ricky
March 2nd, 2011 5:36pm Report this commentI celebrate the Arab Revolt - it is a seminal moment in our history.
The viral network has changed everything and empowered the masses. Obamastan understood this and garnered huge donations by harnessing the power of webpolity.
Information is power and for too long it has been under the control of the Western liberal elite who still try to influence what we are allowed to know....the plutocratic BBC in particular will be undone by iPlayer and free exchange across the net. Murdoch and Thompson and all are yesterday's men. Print will disappear in a decade. Only 300,000 read the odious Guardian, whose Trust is being slowly bled dry.
The social network and WikiLeaks has changed everything. 60% of Egyptians are under 30 years old and they have rid their country of a tyrant in just 18 days using twitterbombs and Facebook group and Bebo.
Watch Iran - a sophisticated youth who hammer away at their keyboards and touch pads......for the young generation across the world universal liberty is a potent force.
Change is a-coming and only the most savvy politicians will benefit most...
barnacle bill
March 2nd, 2011 7:26pm Report this commentWhilst FaceBook & Twitter may have enabled the revolutions/unrest we are seeing in North Africa and the Middle East, which have partly added to the rises in oil prices.
I believe Ben Bernanke with his printing presses turning out a free supply of greenbacks, thus allowing players more chips to throw around in the commodities casino, a bigger factor in the price rises we are having to pay.
libertarian
March 2nd, 2011 9:55pm Report this commentOh so 68% of the price of a litre of fuel at the pump being made up of fuel duty, vat and vat on fuel duty has nothing to do with it I guess. Jeez, some people will believe anything. Twitter and FB..ROTFLMAO
Western Independent
March 2nd, 2011 10:04pm Report this commentThere are other views on the significance of the social media. The impact of demographics and the price of imported foodstuffs are both particularly acute in North Africa. How many in the population have access to the internet and social networks? Clay Shirky's article in Jan/Feb 2011 Foreign Affairs is worth considering (relevant URLs at http://bit.ly/fT5ZKf).
RM
March 3rd, 2011 12:21am Report this commentThe rising oil prices are surely more to do with the West's over reliance on OPEC's oil and decades of authoritarian regimes in the region?
Protests being organised via social networks just reflect the new social space we exist in.
Richard of Moscow
March 3rd, 2011 3:36am Report this commentThe increase in oil prices is a couple of percent from ME uncertainty, but mainly because that's where the QE money has gone: commodities. Hence the rise in oil and gold prices. Where else would it go?
Tim Sweeney
March 3rd, 2011 1:35pm Report this commentnow you know what the real reason for NOBAMA's 18 million dollar website was about- he has prison camps already built for the demonstrators once they finally see what a con man he is-
El Sid
March 15th, 2011 8:34pm Report this commentSheesh, what a waste of electrons. If you're going to have someone commenting on oil prices at least have someone with a basic familiarity of the market.
For instance - Libya's market share in the world oil market is pretty much irrelevant. What oil prices are sensitive to is the amount of spare capacity available to absorb potential disruptions to supply. Libya's 1.7Mb/d is a significant chunk of the current 4Mb/d spare capacity, but we could survive a complete loss of their production. What this is really about is the possibility of losing significant chunks of Saudi production; not only does Saudi produce 9Mb/d, but almost all the spare capacity is there (UAE, Kuwait and Qatar have about 0.9Mb/d between them, but that's all). Regardless of what happens in Libya, if we were to lose even half of Saudi production (and access to their spare capacity), then all bets would be off. The West's response to Libya should be viewed in the light of Saudi - and it's why they've not been rushing to attack the long-standing dictator.
As for the stuff about oil analysts not understanding Twitter - I've not heard anything so laughable in a long time. Mr Lewis is presumably too young to remember how quickly things happened in 1989, long before Twitter existed - and I can assure him, that the City are well used to slightly unconventional approaches to understanding the Middle East. I've had long conversations with the sort of person he lambasts, about the disposition of US carrier groups for instance.
Speccie - please try harder.
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