Editorial – volatility finally cheers us up…

Volatile is an intriguing word. Angry, disturbed, changing form, raging woman (why is it generally associated with the female gender?), unpredictable and yet also buoyant, skittish, imponderable and ephemeral. All […]

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By Sumit Bose

Volatile is an intriguing word.

Angry, disturbed, changing form, raging woman (why is it generally associated with the female gender?), unpredictable and yet also buoyant, skittish, imponderable and ephemeral. All synonyms for volatile.

And yet it’s Latin root comes from Volare which means ‘to fly’. That seems most to me the most apt definition of the word right now.

For once volatility is making us feel like we are flying.

Oil prices have dipped lower than a free diver and as a consequence we are approaching a £1 a litre at the pumps, the economic feel good factor has us spending and even the PM has asked bosses to give us all a price rise. Two of the Big Six have cut – that’s right for the first time in ELN’s existence can I say that – CUT prices due to the fall in wholesale markets and I am sure the others will follow suit. Even the winter (so far) hasn’t been that cold!

The volatile markets are finally working for us, yep hooray.

Luckily too for Mr Cameron, just as we enter the countdown to the election.

In reality there is a down side to all this low pricing, last week we saw job cuts in the North Sea oil and gas sector and more could be on the way. Economists fear there could be a ‘stash your cash buy later’ scenario where consumers wait to buy as prices continue to fall. Retailers are in a price war and their supply chain may well suffer. Deflation is a real possibility and the Governor of the Bank of England has had to explain what he will do to get inflation back UP to the 2% target.

So like everything there are two sides to this story.

And yet, people are happier. You can see it as we fill up at the petrol pumps. I was chatting to a local cafe owner who told me she’d never had such a busy January and travel agents are seeing thousands keen to book up for their summer breaks now, even though we’re still picking up the tab for Xmas.

So why are we so happy to embrace volatility now it seems to be working in our favour? Because we are fickle.

We like things that appear to benefit us directly and we don’t give a damn if someone else has to pick up the tab.

Why don’t we see ‘pro-testors’ cheering the suppliers for cutting prices, why is it all a bit quiet on the social media front that volatility might mean less investment in renewable power as economics favour coal and gas? Where are those saying this shows we have a broken energy market too heavily reliant on foreign fossil fuel trading?

Why aren’t we complaining that prices are just too low?

Because at the end of the day it is human nature to rant against the system when we think it is working against us and to keep quiet when it’s in our favour.

I hate to say it but these prices will have a bounce-back effect, we are going to have to pay whether at the end of this year or next. Markets are volatile by their nature and they go up and down. Perhaps what we need to do is learn to be more balanced in our acceptance of them.

It’s time we appreciate energy companies when they do things that benefit us,  just as we hound them when they put prices up.

Time for us all to be a tad less volatile?

I bet not. Enjoy the good times….while they last!