Thursday, 15 January 2015

Oil Price Benefits Boaters

Well well, excuse the pun but the recent collapse in world wide oil prices is giving great benefits to us boaters.
I have Choosen to ignore the conspiracy theories of the collapse, whether it is to drive the American shale produces out of business, or due to the Chinese growth slowdown or designed to have a negative effect on Russia or Iran`s economy is anybody's guess, so lets just say the global economy is faltering and there is a genuine over supply of oil where market forces are driving the cost down. There are of course many negatives to this situation as oil companies cut back on production, exploration and investment which has a knock on effect across many industries. Enough said.

However, lets concentrate on the short term positives, an oil price collapse leads to: fuel costs reduce, energy costs reduce, transportation costs reduce, and then food prices reduce, petrol prices reduce, so generally the cost of living is reduced. Bring it on.

Time to take advantage of the reduction in pump prices I say: the current average pump price per litre in Spain is around 1.12 Euros, compare this to the same period last year where the average was around 1.35 Euros, a nice 0.23 cent/ litre saving.
To me this means to fill up a 400 litre tank in 2014 cost 540 Euro, today that same tank will cost 448 Euro, a nice 92 Euro saving thank you. So, my logic says time to take advantage, go out and fill the tank.
Now, the situation gets even better, the recent financial markets reaction to the Swiss removing their artificial cap on the Franc/ Euro at 1.20 led to the Forex boys either getting a bashing or making a packet, depending where the money was on that decisive January day.
The effect of this action has seen the Sterling / Euro exchange rate to turn in our favour at 1.34Euro/ £1, this time last year it was around the 1.20 mark, therefore thanks to the Swiss taking this action and adding in the oil price collapse we now have a healthy 123 Euro advantage on a full tank.

Go and treat yourself to a slap up meal and nice bottle or two of Spain`s finest red with every fill up, which ultimately in the short term helps both us and the local Spanish economy!!! My prediction for the next 12 months..oil prices will continue to fall to levels not seen for many years, the middle east produces will maintain output even though demand falls in an attempt to de-stabilise world prices and  force competition to collapse.

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