We close 2014 with a very big question mark. What is happening to the price of oil? Fuel has a huge impact on transport costs and the fall in price we have seen over the past month is already reducing pump prices. Where will it end? Two weeks ago “experts” were predicting prices of $75 per barrel yet already it is at $60 and media speculation indicates that prices could go much lower. In any market change there are winners and losers. In the short term costs for the logistics industry will be lower and market forces will ensure that these lower costs are passed on to the customers.
The potential is that this will stimulate the European economy and move us into growth again. The alternative scenario is that it is a harbinger of a further contraction. Meanwhile climate change issues mean that, what ever the price, burning oil will ultimately be consigned to the dustbin of history, much as coal fired steam trains have been. When this finally happens depends on many things but for now, with lower prices, the impetus for change has moved from partly economic to purely environmental.