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Bet you didn't know that the biggest oilfield on dry land in Western Europe is in England, not only that but it's near a camp site in Devon! Ok, Wych Farm in Purbeck isn't South Fork, but the nodding donkeys do suck up an impressive 85,000 barrels a day, and at $120 each at current prices that's lot of money. In fact about 70 miles of the southern coast of England is a bit of a hot sport for crude and with oil rising 400% in just four years its well worth the speculation. When I read that story in the broadsheets it reminded me of that episode of Rising Damp when Rigsby buys oil shares from his conman tenant Seymour, who convinces the seedy landlord there's oil in the Penninies, then alights with Rigsby's life savings. Oil has been drawn in Singleton, in West Sussex, since 1991, pulling out 30,000 barrels last year alone. Markwell Wood, near Chichester, is reported to be containing up to 200 million barrels at around 12 billion bucks at current prices. Oil speculation is back and there's money to be made. Could the south coast be the new Texas!World demand isn't going to drop soon and so economies have to get used to the rise, absorbing a minimum $80 a barrel cost in the future. Oil companies are all too willing to keep the world-wide price high by funding wars and stoking conflicts, Iraq an extreme example of, Venezuela and Nigeria getting there, both Blair and Bush in the payroll of BP and UNOCAL, respectively - and so those small fields are suddenly viable again. The thinking may well be cynical from both big oil and western governments, the price hike paying for the most costly part of the oil business-exploration, but it works for them. In fact a high oil price benefits governments like ours because they continue to rake in huge tax revenue they can't get from anywhere else. But you guys already knew that - didn't you. The beauty here is that they are taxing people to go to work and as long as they are going to work then there's no recession. It's a balance that the British Treasury have always enjoyed and milked. And with Shell and BP making a million pounds an hour, the only-and critical-success stories on the financial markets to help fund our increasing pension policies and weakening economy, I don't see any change soon. It's widely known the oil companies are also refusing to build new refineries around the world to keep the price high. The big question is when will the oil companies start to help their existing customers by pegging the price so there's no world recession and so less customers? Or are there enough new emerging markets willing to pay top dollar to keep a pace?
The main problem the world has right now is oil and minerals are where the bulk of investments are going, now that the 'credit crunch' is biting our ass, speculators buying oil and so pushing up the cost of the dollar which all oil sales are pegged to. As demand won't fall any day soon then as long as the credit problem is out there then oil will eventually hit $200 per barrel, which will start a catastrophic world recession like we saw in the 70s, unless traders can come up with a complex market derivative that can bypass energy company bulk share buying.
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