Scroggs, I thought the role of a Moderator was to moderate not offer an alternative opinion?
Saccade's post merely presents an opinion, albeit an extreme one not backed up by facts, just as you have ventured an opinion that could be equally challenged as in If only it were that easy we could all sleep well tonight.

That aside, what is this forum if not a Professional Pilots Rumour Network where the views posted may not necessarily be those of the person who posted them and provided that they are not inflammatory, subject to litigation etc all views no matter how speculative should be welcomed?

If there was any doubt about the state of the housing market

http://news.bbc.co.uk/1/hi/business/7440898.stm


The only upside is that you might be able to find a plumber or other building worker to do those jobs you cannot afford to do now.

Please forgive me Scroggs and WWW for my possible naevity, but is not the TAX that is causing the problems over here, not the price per barrell??? I spoke to a shell garage manager and they said people are forgetting that its the 75p or more tax we are paying per litre that is crippling us all!

The acutaul increase per barrell is in fact negligable! Yes it rises over time, but by a mere few pence! Its the TAX that rises further than the increase per barrell thats the problem! $138 dollars a barrell dosent even make the likes of Shell and BP batter an eye lid!

TAX IS THE ANSWER!!!

Aviation fuel is very lightly taxed. Therefore the price per barrel does have a proportionate effect on the price of running a jet engine.

Domestic car fuel is very heavily taxed and is one of the main reasons alongside expensive property and congested transport systems why productivity is so low in the UK. Like all socialist governments this one is running out of other peoples money to spend. Therefore taxes are more likely to go up rather than down.

WWW :(

We don't buy our aviation fuel from petrol stations. There is NO tax on aviation fuel, by international agreement. Despite that, aviation fuel costs around $4.50 a US gallon (about $1.12 per litre, or $1400 per tonne) at the moment - i.e. a lot more expensive than the pre-tax cost of petrol. The £139 per barrel of oil is a the spot-market price, with no tax applied or applicable. The aviation fuel spot-market price directly tracks the oil price. Fortunately for many commercial pilots, airlines 'hedge' fuel - they buy it when it's relatively cheap for use when it's relatively expensive. Most UK airlines are using fuel now that was bought when oil was $70 - $80 a barrel. The real hit will come in around 12 months' time when that hedging runs out - if the oil price hasn't crashed by then!

Thylacine (should I call you Tazzie? Or Tiger?), the point of the Wannabes forum is for those with the knowledge to dispense it to those without. The role of the moderators in this specific area of Pprune is rather different from that in other forums. And don't get too hung up on the rumour part of our title. Facts are a lot more useful when you're planning to spend a houseful of money on your potential career!

Scroggs

What's in a barrel of oil? See http://www.energy.ca.gov/gasoline/wh...arrel_oil.html to find out.

Below is a link to an article giving a broad overview of oil prices going back over 100 years. It has some interesting analysis of OPEC's attempts to control and/or influence price and a conclusion as to why they can no longer do so. If you will recall, George Bush recently visited the Saudis hoping to convince them to turn on the spigots and came back with his tail between his legs. The real reason is because the world uses at least 80 Million Barrels per day an dOPEC only has about 1 Million barrels per day spare capacity, down from 6 Million barrels spare capacity before the 2003 invasion of Iraq. http://www.wtrg.com/prices.htm

As nice as a tax reduction sounds, all it would do is result in higher consumption and there is no spare production capacity, so the price would probably spike even more.

The above article makes two interesting points that are the key to understanding what will effectively bring the price down and both are tied to the current high price as their trigger. First, high prices result in conservation efforts to reduce consumption. Examples are more fuel efficient automobile and aircraft designs, homes being built with better insulation and energy efficiency, nuclear energy becoming comparatively less expensive, etc. Second is the fact that new oil well completions go up when prices are high and down when they are low. Each new well is graded on how many barrels it can produce including accounting for any extra steps that can be taken to get even more from it, such as saltwater, steam or CO2 injection. The cost of completion is high, so the earning potential needs to be higher and it isn't always high enough to justify completion even when there is oil in the hole. Only an increase in spare capacity will bring prices down, but high prices eventually trigger at least these two mechanisms that result in spare capacity, thereby bringing prices down.

Nice links, Adios. The link between price and demand is well understood - though the markets often have trouble with it, and not just in oil! The turnround in demand right now should already have capped prices, but it hasn't - which means the price reduction, when it inevitably comes, will be the more severe (the parallels with WWWs house market analysis are striking!). The oil industry is indeed ramping up exploration and investing in new recovery technology which will result in recoverable oil reserves increasing substantially. At the same time, the very high price of oil will drive efficiencies in all areas of consumption - and these efficiencies will not be substantially given up even when the oil price starts to reduce, which results in further downward pressure. The short to medium term outlook for oil prices, therefore, must be down. Long term, oil will again get more difficult to extract using the wells and technology that exists, and prices will once again rise - but by then we may well have new fuel technologies which will move us on from oil, as we once moved on from coal.

Interesting stuff - and all directly relevant to the airline industry.

Scroggs

...and if anyone fancies drilling (no pun intended) into even more detail, this is a fascinating read on the modern history of oil politics...

http://www.davidstrahan.com/buy.html

(I am not David Strahan btw!)

Yes, and the longer it takes, the better for us, Europeans.
Why? if 1 or 2 major US airlines flying Atlantic go bust, there'll be that much less competition for European airlines over the Atlantic when oil gets back to normal. The aircraft that are sold for bankruptcy land in Asia or Africa, creating more opportunities for European pilots, once again.

Sure, it will be a pittyful sight to see that happening for the American counter-parts. But the people they have elected have put them in this situation. They are learning their lessons the hard way.

Will such a situation result in pilot overcapacity in the US?
Yes, but the effect will be temporary as the most experienced will find a job in Asia very easily. There is also a market with huge potential that many people tend to forget: South America.

South America is to North America what Africa is to Europe: A set of immense unused opportunities available at hand and not easily reachable from other continents. I can see it becoming a very popular touristic destination for North Americans with some new start-up airlines exclusively serving these destinations in the very near future.


I also think this is THE opportunity for Americans to discover the bicycle and dump their SUV's... it's a huge gain for our ecology.

As you see, this crisis is not only about negative stuff! :ok:

HI there,
My local flying school told me that avgas was hovering around the £1.68 per litre, so I think I'd prefer to fly a PA38 on super unleaded from Texaco in Staines...
Why cant we invent aircraft that run on Nicad batteries??

:D

$200 a barrel
 

Interesting thread, allot of apocalyptic predictions by a certain mod :p I spotted this so i thought i would share these stories:

http://business.timesonline.co.uk/to...cle4087314.ece

http://news.bbc.co.uk/1/hi/business/7442170.stm

Don't panic
 

Although I tend towards the WWW view of the present economic prospects :eek:, 'micro' factors affect pilot and wannabe potential.
Positives include:
-The present high price of oil may be short-term, speculation etc.
-Air travel demand is not only international (related to the 'world economy') but, also, in competition with both time-consuming 'public transport' at ludicrous fares and driving your own car- cost has risen faster than air fares !
-Both demographics (1940/50's baby boom) and greed (=retire anyone on high salary and old pension scheme a.s.a.p.) mean that airlines will need to replace plenty of pilots in the next 10 years.
-Only a small proportion of air travel demand is wholly price sensitive- the majority will not 'stop' simply because fares are much higher than last year.

Hope this makes many feel better, If not, get into hot bath with Stanley knife.

We have moved away from coal because we found oil but we can't move away from oil until we find something else. It's like your boat is sinking and you have to abandon it, but until you find another you'll be swimming with the sharks....

Welcome back Scroggs. I don't completely agree with your assertion that supply is adequate. Crude supply may be, but not finished product. Demand is seasonal in any given country with an uptick in the demand as summer approaches. Crude oil capacity is steady, but refinery capacity is limited and suffers regional influences since it is best to refine near the consumer.

Even though demand is steady or even declining in the West, refining capacity can't always keep up with seasonal demand. The problem is exacerbated by refinery managers delaying maintenance when prices are high and then experiencing even more breakdowns. Some regional markets get hit very hard when several refineries breakdown simultaneously.

The Americans haven't built a new oil refinery in 32 years, not even to replace old, dilapidated ones. While this is an indication of the fact that US oil demand has been kept under control, it does contribute to seasonal and regional shortages there. This in turn drives speculators' attempts to capitalize on these seasonal peaks. Combine that with other aberrant factors in the economy and we end up with the mess you see in today's headlines. $139 oil is caused by more than just supply and demand issues, but erratic refinery output and seasonal demand fluctuations in the more influential markets certainly don't help.

Just after posting the above, I spotted this article where BP's Chairman says almost the same thing, though it seems to me that he refers to well output rather than refinery output when he says production capacity: http://www.telegraph.co.uk/money/mai...9/bcnbp109.xml

Thousands facing negative equity
http://news.bbc.co.uk/1/hi/business/7445324.stm

Oil falls back in volatile trade
http://news.bbc.co.uk/1/hi/business/7443393.stm

:}

I've made the decision to go back to college in September and take my A Levels. It's been something I've always wanted to do - I can't think of a better time to do it!

S88

Green and slimy.....
 

Just to stick my oar in about the oil issue, I think that we are rapidly going to move away from the sticky stuff below the middle east sands and go towards the 2nd generation biofuels. The most notable one being algae fuels that is becoming a rapidly more viable option.

There was a bit of US govnernment funded research in the 1970's to 1990's, but was abandoned as fuel was only $0.60 per gallon at the time. http://www1.eere.energy.gov/biomass/...from_algae.pdf

It looks like the best long term alternative as it can basically be used the same way as crude oil (refined into different grades) and it does not freeze at high altitudes. Perhaps as importantly it doesn't compete with food stocks and is more energy dense and faster growing than e.g. corn. Boeing appears to be seriously looking at it: http://www.algalbiomass.org/about/ and KLM are looking to test it this autumn (I can't find at link at the mo).

There are a lot of claims about algae fuels being thrown around, no doubt due to the fact that a lot of the research is performed by independent companies trying to attract funding. BUT the key here is that there is a viable alternative that is just about ready to go, which is one less thing to worry about. It might even be less of a gamble using that £80K loan and investing it in one of companies rather than a cold ATPL :).

Here's some links stolen off tinternet for those interested/bored:

http://en.wikipedia.org/wiki/Algae_fuel

http://www.forbes.com/technology/sci...0528fuels.html

Cheers,

Gareth.

gfunc that is very interesting info cheers :ok:

Corporate aircraft market still booming!

I'm almost positive without seeing any facts that Cessna will report the same...someones gotta fly 'em!

This thread is seriously doom and gloom, whilst some interesting posts, we need some postive threads.

Too easy to write about negative stuff!!