Thursday, June 08, 2006

Greens have head in sand over oil prices
In a press release today the greens criticised the reserve bank statement on price risks.

Reserve Bank has head in sand about oil prices

The Reserve Bank based today's official cash rate statement on highly questionable assumptions about oil prices, and the subsequent impact on the inflation outlook, Green Party Co-Leader Jeanette Fitzsimons says.

"We cannot afford to base our economic planning, as the Bank says it does, on the assumption that the Dubai oil price (which the Bank claims to be the one most relevant to the New Zealand economy) will ease back to $45 a barrel by 2008.

"Let's get real. The hike in oil prices is not some temporary blip to be endured before we resume business as usual. Oil price inflation is here to stay. The Bank should be factoring in the end of cheap oil, not to mention the supply uncertainties to do in future with Iran.

Now let's see what the Russian government says in its press release and its prediciton of future oil prices.

MOSCOW, May 29 - Russia's government has adjusted its forecast for oil prices over the next three years, an economics official said Monday.

"A decision has been taken to upgrade a forecast for oil to $62 per barrel for 2006, $58 for 2007, $53 for 2008 and $48 for 2009," Andrei Klepach, director of the macroeconomic forecasting department at the Economic Development and Trade Ministry, told journalists after a government session.

Previous forecasts had fixed the average oil price at $60 for this year, $49 for 2007, $50 for 2008 and $46 for 2009.

Klepach also said risks remained high that oil prices would decline.

One day the greens may something factual instead of reading from Grimms Fairy tales.

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