Venezuela President on Peak Oil

Venezuela President Hugo Chavez - "We are facing an energy crisis to which we have to pay utmost attention: we've reached the top of the world petroleum production and the price is rising."

Venezuela has a "strong oil card" to play on the world geopolitical stage and against the United States, he said. Venezuela is the fifth largest oil exporter in the world and a key crude supplier to the United States, providing the latter with 1.5 million barrels of crude per day.

Ford, GM SUV sales nosedive

moneycentral.msn.com :

Sales of sport-utility vehicles took a dive in September, dragging down U.S. automakers who were already expecting a consumer payback after a summer of employee-pricing discounts. Gas prices that topped $3 nationwide after Hurricane Katrina didn't help.

The damage:

* Sales of the perennial best-selling SUV, the Ford Explorer, dropped by 58% compared with September 2004. Its larger kin, the Ford Expedition, which gets 14 mpg in city driving, saw sales drop 61%. Ford stopped producing its even larger SUV, the Excursion, last month.

* GM's full-size SUVs, due to be replaced with more fuel-efficient models next year, fell 56%. Sales of its Hummer H2 were off by 31%.

American airlines - crisis getting worse

peakoil.com -> news.yahoo.com :

Refinery outages caused by Hurricanes Rita and Katrina have made worse an already bad situation for U.S. airlines. In addition to record crude prices, the airlines are paying as much as a 60 percent premium for refined jet fuel. That has pushed the price they pay per barrel of fuel above $100.

Crude oil prices have risen but strong demand combined with a bottleneck in refining capacity has pushed prices of gasoline, heating oil, and jet fuel to record high levels. And it is expected to get worse.

The back-to-back hurricanes damaged some U.S. Gulf Coast area refineries, shutting about 18 percent of U.S. capacity. Of this, about 2.09 million barrels, or 12 percent of refining capacity will not be restarting for several weeks, leaving a supply shortfall and forcing providers to parcel out or even cancel on some obligations.

POSB raises savings interest rates

POSB has recently raised its interest rates for savings accounts and fixed deposits across the board. For the POSB savings accounts, the revised rates are :

We have raised our interest rates for S$ deposits accounts on 3 Oct 05, the new rates are:

(I) POSB SAVINGS ACCOUNT* / POSB PASSCARD ACCOUNT

Existing (% p.a.) New (% p.a.)

First S$3,000 0.125 0.250

Next S$47,000 0.125 0.275

Next S$50,000 0.125 0.375

Remaining balance above S$100,000 0.250 0.475

- Well, it's not a lot better, as you can see. Although it's generally a doubling or more, the original rates have been stuck at an anemic 0.125% for a pretty long time. However, since practically every Singapore resident has a POSB savings account, it drives home the point that interest rates are going up. Informed folks should already be aware of that by now, seeing how the Fed has been hiking rates on multiple occasions, and how commodity prices, especially that of the all-important crude oil, have been going up of late.

Savings account interest rates may be a rather lagging indicator, but my opinion is that it's an important one. Will this drive people to put save more cash? Probably not that much more. Fixed deposits perhaps. And I've been watching my money markets tick up faster than the usual creeping pace in the past couple of weeks.

Banks typically pocket the difference between what they loan to their "best customers" (people on private housing loans and car loans) and what they dole out to savings account holders. So we can expect loans to get more expensive - which in fact, is already starting to happen.

As for next year, 2006, it could turn out to be an inflationary year. Unless "demand destruction" kicks in, we'd probably be expecting crude oil prices to continue to trend up. And, as you know, energy drives everything.

(2005-10-05 10:15:40 SGT) [Biz] Permalink

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