Sky News producer John Holliday

Poor Gordon Brown. This weekend he was a man on a mission. So much so that he went on a 6,000 mile day trip to Saudi Arabia to try to get oil-exporting nations to release more black stuff from the ground.

But within hours of touching down on terra firma, what happened to the oil price? It jumped, of course, to more than $136 a barrel. Hardly a surprise I guess given that all the PM got was a repeated promise from the Saudi’s to increase output by an extra 200,000 barrels a day. So will anything bring the cost of oil down?

Gordon says the solutions lies in strengthening the global free market and ending “short-term market distortions”. But will browbeating oil producers achieve that? Would it not be easier to get China and India to stop gobbling oil up?

The experts say the only way to reduce our long-term dependence on oil is via more renewable energy projects. By building more wind turbines and solar and hydro-power. But is ‘Going Green’ the right alternative? Let us know what you would do…

Comments

[michael Wilson 24 Jun 2008 15:45:37]

i think jackpt is on the button. the high oil price is less to do with demand and more to do with speculation - i think today's (tuesday) comment about the fundamental price being around $70 without the speculation is a bit far fetched, but logic suggests to me that if equities and the dollar are weak- which they are - and you think that for the forseeable future the price of oil is a one way bet upwards, then who wouldn't jump in and force it up further. i think the reckoning will come when these contracts begin to expire..

[Dave, Somerset 24 Jun 2008 01:09:29]

This is just a PR exercise by Gordon Brown, desperate to win over the British Voters. Gordon if you really want our vote, then reduce the tax on fuel, and invest in alternatives to oil.

[JackPT 23 Jun 2008 19:33:10]

The Chinese and Indian demand thing is overblown. China's rate of increase/demand actually slowed in the last 6 months. As such China uses around 6,534,000bbl/day and India uses 2,450,000bbl/day. They probably use a little more because those figures aren't to the minute. To put that in context the United States uses 20,730,000bbl/day and the United Kingdom uses 1,827,000bbl/day.

China slowed last year and the price of oil jumped $60. a few weeks back the price of oil lept $10 on spurious news. The supply/demand situation has barely changed in the last year. If anything increased petrol prices in the world's lagest consumer (the US), have led to decreased demand.

I know all that seems a little hard to believe, but it's worth checking yourself. In my opinion there is no correlation between demand and oil prices. There is, however, a correlation between the dollar's value and risky business in the equity markets.

Everyone should check the data before believing what politicians and those with a vested interest have to say. The affect of the new CFTC rules on the 'London loophole' may produce a drop in prices. But I doubt it.

A strong dollar would produce a far greater drop in prices.

[Elizabeth Davies Cape Town 23 Jun 2008 15:20:03]

It is the "old" story, the Arabs have the black gold, the West want it..therefore the West must pay. Gordon Brown's call for the Arabs to help is worth nothing.
Brown needs to do his own sums at home and take a hard look at fuel and vechicle taxes if he wants any credibility.

[Sideliner UK 23 Jun 2008 13:18:15]

The Prime Minister has put forward the idea (and seems to have gained some commitments) that the oil rich Arab stated invest in UK nuclear and renewable energy infrastructure. Whilst they do have money available, given that much of the current and past economic problems with energy costs came from reliance on foreign suppliers, is it really a good idea to perpetuate this reliance, rather than invest from UK or possibly EU resources?

[Michael Cornwall 23 Jun 2008 11:18:19]

Must make a change away from oil.At least Mr Brown whom I do not support,is making an attempt to do something. What about reducing tax on petrol?

[Khalid 23 Jun 2008 10:38:59]

Sir
Had he gone to Saudi Arabia to perform the Hajj or Umrah, then one could justify the round trip, but jut to go there and create even more pollution for the sake of securing another meeting, one cannot comprehend the chain of thought behind such a trip.
Insofar as world reliance upon oil, yes China & India need to increase their price per litre to 60p forthwith and clear the air before the emerging olympics.
Further, as it has been stated upon these blogs, UK price per litre before tax is 45p, add 15p tax and hey presto we get that magic number 60p. Question arises if he has been chancellor, who did his maths, because I've got [Broken Bones-Love Inc].