Nobody knows anything (oil price edition)

Perhaps no single number is more important to the world economy than the price of oil. Modern economies depend on energy, and oil remains our largest energy source, supplying 31% of the world’s energy needs (another 21% comes from gas, whose price now moves quite closely with oil). And yet, huge movements in this number seemingly take experts by complete surprise.

OIl price predictions 2015
The price of oil in constant 2008 dollars, compared with the US Energy Information Authority predictions from 2000 and 2010. Data from the EIA.

My graph shows how the price of oil, corrected for inflation, has changed in the last 45 years. This is an updated version of the plot I blogged about five years ago; I included the set of predictions that the US Energy Information Administration had made in 2000. Just a few years later, these predictions were made nugatory by a large, unanticipated rise in oil prices. The predictions the EIA made ten years later, in 2010, had learnt one lesson – they included a much bigger spread between the high and low contingencies, amounting to more than a factor of three by the end of the decade. Now, only halfway into the period of the prediction, we see that the way oil prices turned out has so far managed both to exceed the high prediction and to undershoot the low one.

These gyrations mean that views that were conventional wisdom just a couple of years ago have to be rethought. Continue reading “Nobody knows anything (oil price edition)”

Land of my Fathers (and they can keep it)

When someone asks me “where do you come from”, my reply is generally “I’m Welsh. A Welsh Jones. Descended from a long line of Joneses” (and Lewises and Williamses and Howells and so on). But then I have to qualify this, not least because I don’t sound Welsh: I sound like someone who’s spent 15 years in Cambridge (with maybe a bit of east midlands/Yorkshire influence). I was born in England (Stamford, Lincolnshire); my father had left Wales to join the Air Force, so my early childhood was spent trailing around a series of RAF bases in the Midlands and Eastern England. It was only after I finally left home that my parents moved back to Wales. The only time I properly lived in Wales myself was for a year in 1967, an experience that was so alienating and unhappy that, even though it was a short time, and a long time ago, it colours my emotional response to that part of North Wales, the Lleyn Peninsular.

The circumstances were this – after a couple of postings in East Anglia, my father was sent abroad, to help with what turned out to be the shambolic and violent end of one corner of the British Empire, in Aden, now in the Yemen. Aden was then a Crown Colony, a strategic port and military base for the British, usefully placed on the way to India and the Far East. Britain’s retreat from Empire reduced the port city’s value, but through the mid-1960’s a worsening insurgency had destabilised the British’s attempt to install a friendly government before they left. By 1967 parts of the city were alternately a no-go zone for the British troops, then being reoccupied with some brutality. Finally (and I think uniquely in the end of Empire) there was no orderly hand-over when the British left, no ceremonial lowering of the flag, no hand-shakes between the Governor-General and the incoming President, just a scramble by the British forces to get out with as much of their kit as they could carry. My father’s part in the retreat, having organised the repatriation of the remaining families, was to tip Radio Aden’s record collection off the Steamer Point quay into the harbour, to make sure the Communist hordes of FLOSY and NLF didn’t benefit from the latest Jazz and Pop sounds (for some reason he saved one Thelonius Monk album, which I still possess).

Aden was clearly not a place for dependents, so my mother and I were packed off to the North Wales seaside town of Pwllheli, where my mother’s parents lived. There my mother tried to avoid reading the newspapers, with their reports from Aden of random shootings and grenade attacks, while the six-year-old me went off friendless to a new school. I remember the terrible food and the boys’ toilet, outside, in the corner of the playground, a slate urinal brilliant green with moss and with an overwhelming ammoniacal smell of decaying boys’ urine. The school was old-fashioned in teaching methods and discipline – I vividly remember an assembly with a purple faced teacher standing on a stage, roaring with anger and threateningly waving his stick above his head. I never found out what atrocity it was that some child had committed, as the diatribe was conducted, like all the other business of the school, entirely in Welsh, a language I didn’t know then (and still don’t).

West End Parade, Pwllheli
West End Parade, Pwllheli, N. Wales. A flat in one of these houses was my unhappy home for a year.

My mother must have been bored, worried, lonely. At least she had a car, a sweet little Mini, in which she frequently drove me to Caernarvon Castle, with which I became fascinated. She would take her own father on trips a few miles up the coast, to see his friend, the priest and poet R.S. Thomas. I don’t exactly know what had drawn Thomas and my grandfather together, whether that was religion, or poetry, or simply a shared gloomy disposition. My grandfather died before I got to know him properly; I know he was a cultured man, though he had dropped out of theological college to become a Conservative Party activist.

Something I don’t remember myself, but which my mother tells me, is that for the first few months I refused to talk about my father at all, or even acknowledge his existence. Continue reading “Land of my Fathers (and they can keep it)”