Singapore electricity rates to go up by 2.3% next quarter

channelnewsasia.com, singaporepower.com.sg :

Electricity tariffs will go up by an average of 2.3 percent or 0.49 cents per KWh (kilo-watt hour) between October 1 and December 31 this year. SP Services explains that electricity price is pegged to the forward price of fuel, which is higher for the next quarter at $88.52 per barrel, compared to $87.49 per barrel previously.

The tariffs are reviewed every quarter and adjusted in line with fluctuation of fuel oil prices. The tariff adjustments have been approved by industry regulator Energy Market Authority. The next review will be in December.

- The new electricity rate for residential users will be 21.64 c/KWh from Oct 2006. The rate of increase is 10.6% since Oct 2005 (19.57 c/KWh), and 30.9% since Oct 2004 (16.53 c/KWh).

And you might have thought that falling oil prices this past month might have led to lowered electricity rates. Nope, it doesn't quite work that way. That's because they review prices quarterly, and use a 3-month moving average for their calculations. In traders' terms, that might be roughly equivalent to a 90dma. So for a drop to happen, oil prices must have dropped for the past 3 months or more.

But why have petrol prices dropped then? This is because, from empirical experience and scattered news reports, the supply chain here has about a 1-2 week inventory in the system. So when crude oil prices go up (/down), it takes about 1-2 weeks for the price change to filter through to the petrol stations, compared to 3 months for the electricity rates.

These are interesting system dynamics. Something to think about.

Russian nuclear fuel going to Iran plant

peakoil.com -> guardian.co.uk :

Russia will ship fuel to a controversial atomic power plant it is building in Iran by March, news agencies reported. The agreement signed by Sergei Shmatko, head of the state-run company Atomstroiexport, and Mahmoud Hanatian, vice president of Iran's Atomic Energy Organization, should allay Iran's complaints that Moscow is dragging its feet on supplying fuel for the Bushehr plant. It will also renew concerns by the West, which accuses Tehran of seeking to enrich uranium in order to build nuclear weapons.

"The document provides for supplying Russian fuel for the atomic energy plant in March, physical startup in September 2007 and electric generation by November 2007," Hanatian was quoted as saying by ITAR-Tass. Shmatko said about 80 tons of fuel would be supplied.

Iran says it needs enrichment to produce fuel for nuclear reactors that would generate electricity, and insists its program is peaceful. Enrichment can also create weapons-grade material, however, and the United States and other nations have accused Tehran of seeking to develop nuclear weapons. Trying to ease Western concerns, Moscow has agreed with Tehran that the spent fuel will be shipped back to Russia. However, Iran has resisted Russia's proposal to conduct all enrichment on Russian soil.

(2006-09-28 00:42:18 SGT) [Energy] Permalink

Oil price very low, action needed: OPEC chief

peakoil.com -> today.reuters.com :

Oil prices are very low, harming investment in the industry and something must be done to steady the market, OPEC President Edmund Daukoru said. Daukoru said OPEC was already talking internally about the price drop, which has seen U.S. crude fall about 20% from a record $78.40 a barrel in mid-July to around $61 on Tuesday. "The U.S. economy is slowing down, the threat of inflation, if you put these factors together, we are heading for a soft market and something needs to be done to steady the market," he said.

Saudi Arabia and its neighbors Kuwait and the United Arab Emirates have been pumping well beyond their allocated limits to make up for those struggling to meet theirs, such as Venezuela and Indonesia. Many in the oil market expect the Organization of the Petroleum Exporting Countries, which pumps a third of the world's oil, to cut supplies if U.S. crude falls convincingly below $60. Only a week ago, influential Saudi Oil Minister Ali al-Naimi described a U.S. crude price of around $62 as reasonable for an oil industry seeking to boost supply to energy-hungry consumers.

- Will they make up their minds? Is $60 oil just right, or is $60 oil too low? Does anyone still remember when $45.90 was an all-time high?

Prudhoe Bay to resume full oil output end of October: BP

peakoil.com -> news.yahoo.com :

BP has said that it expects to resume full production by the end of October of 400,000 barrels of oil a day from Prudhoe Bay, the biggest US oil field. A spokesman said that output had been raised over the weekend to 300,000 barrels per day after normal output was slashed by about half last month owing to a pipeline leak. Prudhoe Bay accounts for 8% of total US oil production.

BP said last week that it planned to embark on a review of its global operations following the Prudhoe Bay incident and other big setbacks for the British energy group in the United States. These include a fourth delay to BP's new Thunder Horse platform in the Gulf of Mexico, which is not now likely to begin operating until mid-2008.