You can see the oil industry's woes for yourself, at anchor in the Firth of Forth. Very Large Crude Carriers are parked off the coast of East Lothian until the price rises, full of North Sea oil recently loaded through the Hound Point terminal. Onshore storage facilities are full. You can see other tankers at rest and laden with the crude stuff off the coasts of Suffolk and Cornwall. The gamble made by oil traders is that the cost of storing oil in these tankers - two million barrels in each of the larger ones - is less than the gain to be made out of waiting to sell it. But industry hopes of a rise in the oil price have been dashed time and time again over the past two years. Other consequences can be seen over the horizon, on Shell platforms, where Wood Group maintenance workers are back on strike this coming week, in protest at the sharp cut to their pay. Others have protested at the change to rotas, shifting from two-week turnarounds to three-weeks. The consequences were also clear from another grim week for the oil and gas industry, as the majors unloaded their half year results. The message was consistent, and no reassurance to those offshore workers facing diminished pay and conditions - the cost-cutting goes on. As the results were published, the oil price fell yet again. Brent crude fell below $43, down 20% from a peak it reached in early June. With global supply still buoyant, the short-term expectation is for a continued fall, even if those tankers at anchor in the Forth are a sign of expectations that the price will pick up again before too long. In Britain, it is no compensation for the oil industry that the dollar value appear more attractive in pounds, following the weakening of sterling. The industry thinks, invests, accounts and reports in US dollars. The exchange rate becomes an issue when it reaches the customer. That rise in the sterling price for a given dollar rate represents the increased cost, for those who earn and invest and buy their fuel in pounds - businesses and households alike.You can see the oil industry's woes for yourself, at anchor in the Firth of Forth. Very Large Crude Carriers are parked off the coast of East Lothian until the price rises, full of North Sea oil recently loaded through the Hound Point terminal. Onshore storage facilities are full. You can see other tankers at rest and laden with the crude stuff off the coasts of Suffolk and Cornwall. The gamble made by oil traders is that the cost of storing oil in these tankers - two million barrels in each of the larger ones - is less than the gain to be made out of waiting to sell it. But industry hopes of a rise in the oil price have been dashed time and time again over the past two years. Other consequences can be seen over the horizon, on Shell platforms, where Wood Group maintenance workers are back on strike this coming week, in protest at the sharp cut to their pay. Others have protested at the change to rotas, shifting from two-week turnarounds to three-weeks. The consequences were also clear from another grim week for the oil and gas industry, as the majors unloaded their half year results. The message was consistent, and no reassurance to those offshore workers facing diminished pay and conditions - the cost-cutting goes on. As the results were published, the oil price fell yet again. Brent crude fell below $43, down 20% from a peak it reached in early June. With global supply still buoyant, the short-term expectation is for a continued fall, even if those tankers at anchor in the Forth are a sign of expectations that the price will pick up again before too long. In Britain, it is no compensation for the oil industry that the dollar value appear more attractive in pounds, following the weakening of sterling. The industry thinks, invests, accounts and reports in US dollars. The exchange rate becomes an issue when it reaches the customer. That rise in the sterling price for a given dollar rate represents the increased cost, for those who earn and invest and buy their fuel in pounds - businesses and households alike.
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