1 Why a small dip in oil price matters an awful lot (Phillip Inman in The Guardian) After a mini rally, oil prices are falling again. From $62 a barrel 10 days ago, Brent crude has slipped to $58.43. It may not seem like much of a cut after the collapse in world oil prices that sent Brent tumbling from $115 to $45 a barrel between last June and January, but it is still significant.
The reason this turn in the price of oil matters can be seen in every corner of the world economy: when fear of a new cold war or a eurozone break-up hangs over every corporate and government decision, cheap energy lightens the load. Manufacturers have benefited from cheap imports of oil. Households have more spare cash after lower costs at the pumps. There are unwelcome side-effects, and nothing written here takes into account the climate change effects, but for the developed economies it is a boon.
Many economists expected last year’s slump to prove temporary. The forecast rested on the assumption that a low oil price would force out firms involved in costly extraction. But they were wrong that this alone would squeeze the supply of oil to such an extent that prices would start to rise. Analysts have pointed out that the fracking rigs left in operation have become more efficient – extracting more oil and gas out of the ground than before.
More importantly, the countries outside Opec (which has maintained output levels) are pumping more oil to make up for lost income. Russia is a case in point. So looking ahead, should prices start to climb again, the ceiling will be much lower than the $110 price common from 2009 onwards. And the carbon-fuelled growth that most economies rely on will continue for a little while yet.
2 BHP Billiton profits down by nearly a third (BBC) Profits at mining giant BHP Billiton have been hit by the falling price of iron ore, coal, copper and other commodities. Underlying profit for the half-year to 31 December fell by 31% to $5.35bn, but that was better than industry analysts were expecting. To compensate for falling prices BHP has made deep cuts in its spending on exploration and other investment.
“We started to prepare for a sustained period of lower prices almost three years ago by increasing our focus on efficiency and lowering our investment,” chief executive Andrew Mackenzie said in a statement accompanying the latest results. BHP is planning to move its aluminium, manganese into a separate company, which will also hold nickel and silver mines and some coal mines in Australia and South Africa.
The company has also been hit by falling oil prices. Last month BHP Billiton announced a 40% reduction in its US shale oil operation. By the end of June it plans to have reduced the number of shale rigs from 26 to 16.
3 The myth of Europe (Omaira Gill in Khaleej Times) Crisis, economy, catastrophe, Europe. These are all Greek words, and today I’ll share with you how the continent of Europe got its name, which has its roots in the Greek myth of Europa. The story of Europa always makes me feel a little sad, seeing as at the heart of it is a woman born in Asia who is taken to another continent by force, never to see her homeland again.
In the Greek myth, Europa was a beautiful maiden. One day, the god Zeus noticed Europa among some other young women and was struck by her beauty and grace. He devised a cunning plan to lure Europa away. One day, when Europa and her female companions were playing on a shore and collecting wild flowers, Zeus transformed himself into a dazzling white bull, swimming up to the shore and grazing placidly nearby.
Europa was taken by the bull, and in time approached it to admire it more closely. Eventually, she was persuaded to sit on the bull’s back for a ride, which is when Zeus in the guise of the bull took off at great speed, running through the meadows and swimming into the sea.
Eventually the bull arrived on the island of Crete, where he let Europa disembark and revealed his true identity as Zeus. Europa remained in Crete for the rest of her life and became another of the greedy god’s many conquests. She gave birth to three sons, Minos, Rhadamanthys and Sarpedon.
Europa’s brothers searched high and low for her, ending up in Asia Minor, but they were unable to locate their sister. As a sign of his love for her, Zeus named the continent of Europe after her. When I read the myth of Europa for the first time, it left me feeling despondent.All I could think about was poor Europa pining for her homeland, for Asia, the places and people she grew up with.
She was made to give up everything she knew just because a god couldn’t take no for an answer. Not all Greek myths are happy, although this one probably falls into the ‘Happy’ category for nearly everyone reading it except me. To me, it reads like a tragedy. No one I’ve ever spoken to in Greece has felt sorry for Europa. It just goes to show what perspective can do.