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FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Crude Oil Price Crash Catastrophe, Independant Scotland Literally Begging to Rejoin the UK

Commodities / Crude Oil Jan 14, 2016 - 12:47 AM GMT

By: Nadeem_Walayat

Commodities

The oil price collapse of 2015 has continued into 2016 with the price of oil plunging to a 12 year low of $29, less than 1/3rd of just over a year ago at the time of the Scottish Independence mania that surrounded the Independence Referendum on the backs of an oil price of over $100 which had the Scottish Nationalists fantasising of the oil price heading to $120 and beyond, as part of painting a propaganda picture of an Independent Scotland Utopia to be built on tens of billions of free money each year in the form of tax revenues from a perpetually expanding north sea oil industry. Not only were the nationalist convinced of the oil price soaring soaring into the stratosphere but would heavily round on anyone that suggested that oil prices could actually fall as being Unionist propaganda.


The following video aptly illustrates what would have happened not only in Scotland but for much of the UK during the past 15 months if the SNP separatist fanatics had succeeded in convincing the Scottish electorate into voting for Scottish independence that would have unleashed forces that literally would have torn the UK apart, something that the SNP fanatics continue to remain ignorant of, this despite the fact that the oil price collapse of 2015 alone would have collapsed the Scottish economy fuelling the process for the disintegration of first Scotland and then the rest of the UK.

UK During the Year After Scotland Voted YES to Independence:

by SaveTheChildren (youtube)

At the time I warned in a series of articles and videos that the Scottish Nationalist fanatics were trying to convince the scottish people to jump off the edge of a cliff, effectively commit economic and social suicide as excerpted below:

Sep 07, 2014 - Scottish Independence YES Vote Panic - Scotland Committing Suicide and Terminating the UK?

Opening Pandora's Box of Disintegration, the Balkanisation of Britain

The peoples of the United Kingdom are literally being sleep walked towards the edge of the cliff, most completely unaware of the potentially disastrous ramifications for not just Scotland but for what lies in store for the remainder of the United Kingdom following a Scottish Independence YES vote that would break start the process for ripping apart a 300 hundred year old entity of an United Island of Great Britain, which as I have repeatedly warned of during 2014 that a YES vote would literally sow the seeds for the balkanisation of Britain as this Island would literally tear it itself apart as the status quo of what had been taken for granted would no longer exist.

A whole host of news during the past year illustrate that the approaching Scottish Independence vote has already galvanised agitants right across the UK, for instance blowing on the embers for Cornish independence as they wave their aptly coloured Cornish black funeralesk flag that continues with calls of autonomy literally right at the other end of Britain from the Northern and Western Isles with calls for their own devolution from Edinburgh and even calls for their own parliament that sows the seeds not only for the balkanisation of Britain but also for breakup of an newly Independent Scotland that following a YES vote would soon start to disintegrate, as for instance the bordering regions would reassert their separate identity that has far more in common with the North England than much of Scotland, formerly known as the Kingdom of Northumbria that stretches from Edinburgh in the north all the way to the city of Sheffield in the south.

Whilst Alex Salmond, Scotland's Nigel Farage repeatedly plays the Scotland is rich because of North Sea oil card, what he convientely omits is that a significant portion of Scotland's oil reserves lie in the waters of the Northern Isles (Orkney and Shetland). Many people of the Northern Isles see themselves as having far more in common with Norway than Scotland which given the near immediate currency, financial and economic crisis that would follow independence would be fast pulled towards sharing sovereignty for far greater stability with the likes of Norway that could achieve what it could never have done militarily, namely expanding its borders and gaining many western north sea oil fields. Though in all probability the Northern Isles would probably eventually settle as becoming a protectorate of the United Kingdom along the lines of the Isle of Man.

So if Alex Salmond 'King of the Scots' does succeed in his tunnel vision mission for an Independant Scotland then he will likely go down in history as the first and last Prime Minister of Scotland as we know it today, which effectively means a Yes vote on 18th September will be Scotland voting to commit suicide as when the dust settles what remains would be a mere fraction of its current size.

Oil Price Crash and SNP Independent Scotland

We'll 15 months on and this is what Scotland's fantasy oil revenues would now be looking like, which for the duration has been met by delusional propaganda from the Scottish nationalists that the fall in the price of oil was always just temporary and a rebound was just around the corner, instead the oil price has continued to grind lower slowly turning the Scottish oil industry and Independence finances into dust as the fantasy expectations for oil revenues for £11bn a year would have resolved into a loss of £2 billion a year and where today Scotland's economy is only being kept alive by a £9 billion annual English subsidy that is being supplemented by emergency life support for Scotland's oil industry to the tine of £2 billion, which illustrates the catastrophe that Scotland only avoided by a whisker.

Here's a glimpse of SNP propaganda during the referendum campaign that nearly convinced Scotland to commit suicide -

"There can be little doubt that Scotland is moving into a second oil boom. "Even with a cautious estimate of prices remaining at $113 a barrel being used, it's clear that Scottish oil and gas could generate more revenues than has previously been assumed." Alex Salmond, SNP Leader and First Minister.

Despite heavy English support of the Scottish economy, the oil price crash has resulted in the Scottish economy effectively flat lining during 2015 which compares against estimated UK GDP of 2% for the year. Despite this the Scottish people mostly remain in a delusional state as evidenced by expectations for another probable landslide for the Nationalists at the May 2016 Holyrood elections as apparently the lack of growth in Scotland is somehow England's fault, rather than the nationalist fanatics who remained determined to destroy Scotland.

The latest news of 4,000 job losses at BP further illustrates the crisis that Scotland is facing as there is no sign of the oil price rebounding to anywhere near the $113 that the likes of Alex Salmond were fantasising about, as required for Scotland's expensive offshore oil industry to recover. Instead Scotland's oil industry is being slowly ground into dust with an estimated 20% of oil sector jobs lost to date.

The inconvenient truth that the Scottish nationalists will never admit to is that if Scotland had voted to commit suicide in September 2014 then today the people of Scotland would be literally begging to rejoin the United Kingdom. With bordering regions in open revolt, much as I warned would transpire in the run up to the Referendum, the only difference being that I thought that the breakup of Scotland would take place over 3 years or so, instead it would now have all happened in less than half the time!

So the Scottish nationalists instead of moaning and complaining and blaming others for their own ineptitude for once need to get off their high horse and say THANKYOU to England for saving their sorry asses during the oil price collapse of 2015-2016. Given the oil price collapse, the chances of another referendum are ZERO, so instead now it should be England's turn to seriously consider cutting the Scottish noose from around England's neck which at the least should mean scrapping the Barnett Formula that funnels £10 billion or so to Scotland each year. Nevertheless the EU referendum looks to offer the people of England at least some degree of self determination after decades of a pseudo democracy.

The bottom line is that the Scottish Oil Industry is DEAD! Because it cannot compete against the likes of fracking!

Oil Price Forecast 2016

Ensure you are subscribed for my forth coming crude oil forecast for 2016.

My existing analysis as of Sept 2015 concluded in expectations for the oil price to have entered into trading rage of $64 to $40 with main risk being of downwards spikes out of the range to $30:

Sep 01, 2015 Crude Oil Price Forecast 2015 and 2016

Crude Oil Price Forecast 2015, 2016

Whilst it is highly probable that my original forecast low of $36 has now been achieved at $37.75. The over riding message from this analysis is that the crude oil price looks set to enter into a prolonged trading range of approx $64 to $40 for the next 12 months. Therefore my forecast conclusion is for crude oil to trend higher in the immediate future to the upper end of this trading range before turning lower and to remain within this trading range for another year. The range could also exhibit very short-term spikes to outside of this range i.e. to $70 and as low as $30, though I would expect downward price spikes to be far more probable than upward spikes above $64.

In terms of investing, with a sustained low oil price oscillating within a trading range for at least another year then this suggests that the oil sector is going to continue to contract with many players going bust due to unserviceable debt mountains built up during the boom years. Therefore it is going to be difficult to find the few golden nuggets that buck the trend amongst all of the junk so it is probably better to wait a year or so for the dust to settle then take a gamble today. However, if one does want to invest then accumulating positions at the bottom of the trading range is probably the best strategy.

Accompanying video analysis:

Ensure you are subscribed to my always free newsletter that includes the following planned newsletters -

  • Crude Oil Trend 2016
  • Interest Rates 2016
  • US Dollar Trend Forecast
  • US House Prices Forecast 2016 and Beyond
  • Stock Market Trend Forecast 2016
  • Gold and Silver Price Forecast 2016

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Source and Comments: http://www.marketoracle.co.uk/Article53667.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2016 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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