$200 oil price warning: How will it affect you?
The news that oil prices may hit $200 per barrel in the near future is shocking. What impact will this have on your life if this prediction of spiralling oil prices comes true?
Argun Murti, a leading oil analyst with a track record of successfully predicting future oil prices, has issued a report that warns of oil prices increasing to $200 per barrel.
Alarmingly, he predicts that this price could be reached towards the end of 2008, although within two years is a more likely time frame.
With oil already at $123 per barrel, after a 25pc rise in four months, further increases to $200 (63 percent) will have a large impact on all of us.
Motoring costs have already increased by an estimated 10pc over the last year so it now costs around £5,540 per year, on average, to run your car.
Fuel remains the biggest vehicle-related expense, and we all know how painful a trip to the petrol station is these days. Diesel is costing £1.19 per litre locally at the moment so a 63pc price rise will take this to £1.94 per litre!
With fuel costing around £2 per litre it is clearly important to find ways to reduce your fuel consumption. Here are a few ideas:
- consider a hybrid, electric, or low-emissions car if buying a new vehicle
- keep your car well maintained
- drive as smoothly as possible, and avoid top speeds
- keep tyres properly inflated
- share the driving where possible with others at work and on school runs
- Gas guzzling cars are going to depreciate steeply so consider very carefully if this is a sensible car to purchase.
If you heat your house with oil then a 63pc rise in heating costs is going to have a high impact on your cost of living.
It already costs around £1000 to fill the average domestic oil tank, so you will be faced with a bill of £1630 when oil hits $200 a barrel.
We wonder how such high oil prices will affect the value of rural properties which are so dependent on oil for heating and transport. Escalating oil prices will boost the cost of living in the countryside and may have a negative impact on the value of rural house prices.
Clearly as heating costs increase, it becomes more important to ensure that your home is as well insulated, and as energy efficient as possible.
With this recent and welcome bout of warm weather it may seem strange to be planning for the cold months to come, but actually this is the best time to get great deals on loft insulation.
We like Knauf space blanket loft insulation as it has excellent thermal properties and is very easy to lay. Most importantly, you can often buy it half price at B&Q, particularly in summer.
Food has to be transported so it is inevitable that a 63pc rise in oil price will result in increased food costs.
There are many ways to reduce your food bills and you will probably end up with a more healthy diet in the process.
The key to saving money on food is to make small changes, perhaps by cooking a couple of meals from raw ingredients each week and by using cheaper produce without sacrificing quality.
Growing your own vegetables could help reduce your food costs too and buying as much food as possible from local shops and suppliers is always a good idea.
So oil prices hitting $200 soon is not good news. This is only a prediction at the moment, of course, but the way oil prices are increasing now is of definite cause for concern to us all.