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Saturday June 28, 2008

Singapore petrol prices increase again, up 13th time since July 2007

This article belongs to the Singapore inflation watch story arc.

sgenergycrisis.blogspot.com -> asiaone.com :

Singapore petrol pump prices have risen again, with petrol going up by 5 cents a litre and diesel, 10 cents. This latest increase on 24 Jun 2008, the 13th consecutive rise since July 2007, started with Shell, followed by Caltex, ExxonMobil and SPC. Now, RON92 petrol costs $2.203, RON95 $2.236, and RON98 $2.31 per litre. Diesel is now $1.933, nearly doubling in price from a year ago. Ironically, in a time of record prices, oil companies say that profit margins in fuel retailing are thin. In Singapore and Malaysia, BP has quit fuel retailing. In the US, ExxonMobil is selling off 2000 stations, concentrating in upstream exploration and refining.

- Earlier on, I mentioned that I made the easy call that all grades of petrol in Singapore would eventually be selling for over $2 per litre. We got there. The next easy call is that diesel will eventually also be selling for over $2 per litre. Seeing how crude oil prices have been setting record highs again recently, that's really quite a no-brainer, isn't it?

Also, earlier in the week, some colleagues have been grumbling to me that since oil prices have been going down, shouldn't the price at the pump be lowered immediately too? At the time, NYMEX crude oil prices had come down somewhat off a then-record high of $139.89, and were bouncing back and forth just below the $140 resistance level and just above the $130 support level. Of course, I did not have the time to explain all the technical analysis stuff. Instead, I patiently explained, once again, that petrol pump price changes are not instantaneous and, based on empirical observation, are subject to a lag time of around 1 to 2 weeks. In other words, what we are seeing is the price action of about a couple of weeks earlier, and an averaged-out one at that, being a roughly 2 week moving average. Investors who dabble in technical analysis should know what I am talking about - this is rather similar to movements on, say, a 14dma chart.

Guess what happened next? Almost no sooner had I received these complaints of "why are they raising petrol prices when oil prices are coming down" then crude oil prices started to venture back into record-setting territory again. Being a peakoiler, investor and commodity fund manager, this is very familiar territory for me. Oil is in a bull market, and we ain't seen nothing yet. I fired off an SMS to the sales lady at Kah Motor (something to the effect of, "crude oil just broke a new record, so where's my hybrid?"). She replied that my 2008 Honda Civic Hybrid might take another month or two to arrive. Bummer. No choice but to wait. Meanwhile, I will continue to observe as oil continues to set new record highs.

Updated :

1. Singapore petrol prices lowered 4 cents after crude oil drop
2. Singapore petrol prices down another 4 cents on lower crude oil prices
3. Singapore petrol prices drop 4 cents for third time in 2 weeks

(2008-06-28 23:57:03 SGT) [Energy] Permalink

NYMEX crude oil price hits $142.99 record as world stock markets tumble

This article belongs to the NYMEX crude oil price records story arc.

channelnewsasia.com :

Oil prices struck fresh record highs over $142 on Friday [27 Jun 2008] as the US dollar remained weak, while world stock markets tumbled amid economic jitters. The NYMEX crude oil futures contract for Aug 2008 delivery struck an all-time intraday record of $142.99. The jump in oil prices, which have doubled in the past year, has triggered inflation fears and worries that US economic growth could be crimped further. The ailing dollar has fueled demand for oil from traders. OPEC's president predicted Thursday [26 Jun 2008] that oil prices could reach $170 this year because of the weak dollar and geopolitical unrest.

- That is the second time in a day that I have had to put up a "crude oil hits new record high" post. Oil continues its record-breaking run, now 2 trading sessions in a row. It is interesting to see the media start to run out of reaons (or excuses) for oil's rise as it continues to set new records - I mean, how many times can you point to a weak dollar, speculation, geopolitical unrest, and so on, as each of these factors is only partly responsible for the big picture, while the real overall drivers are the fundamentals of supply and demand.

So, onward to $150 oil, and then $180, $200, $300 and over $400. These are the resistance levels on the upside. And I've been waiting to say this but it has come faster than I thought : we might have the makings of a $140 support level, and these support levels continue to come in at $10 intervals : $130, $120, $110 and $100. And I wouldn't really hang around and wait for those last 2 support levels. Oil is in a bull market, and we haven't seen anything yet.

(2008-06-28 07:14:25 SGT) [Energy] Permalink

Friday June 27, 2008

NYMEX crude oil hits $142.26 record, investors flee falling stock markets

This article belongs to the NYMEX crude oil price records story arc.

bloomberg.com :

Crude oil rose above $142 a barrel for the first time as falling stock markets spurred investment in commodities. Oil has gained 46% this year as concern that the economy may head into a recession pushed the global equity markets [MSCI World Index] down 12%. Crude oil for August delivery climbed to a record $142.26 per barrel today. Yesterday, the contract hit a record of $140.39 as Libya threatened to cut output and OPEC's president said prices may reach $170 within months.

- This is the second trading day in a row that crude oil prices have hit a record on the NYMEX. If we were to get another of these 5-trading-days- or 7-trading-days in-a-row records then we could be on track to hit $150 oil faster than many people might expect. Beyond that, the next resistance level would be $180, and then on to a big fat $200. Expect lots of hue and cry when oil does reach $200 per barrel. So it looks like it was a good move for the fund I am managing to have gotten in at around $130 support. I was sort of semi-waiting for $120 and was going to setup a buy order for that level but of course that did not materialize. Oil is in a bull market, and we haven't seen anything yet!

(2008-06-27 22:52:43 SGT) [Energy] Permalink

Singapore stagflation : May 2008 exports fell most in 17 months; inflation at 26-year highs

This article belongs to the Singapore stagflation watch story arc.

bloomberg.com :

Singapore's exports fell the most in 17 months in May [2008] as the island's manufacturers shipped fewer electronics and other goods to the US and Europe. Non-oil domestic exports dropped 10.5% from a year earlier, the trade promotion agency said today [17 Jun 2008]. Manufacturers across Asia face easing demand amid slowing growth in the US, the region's largest overseas market. Pharmaceutical shipments dropped 48.5% in May from a year earlier, while electronics shipments slipped 8.5%, the 16th consecutive drop. Semiconductor shipments dropped 12.6%. Sales to the European Union fell 28% in May and US shipments dropped 22.3%.

- The Singapore economy continues to be confronted by stagflation as economic weakness persists and shows signs of actually worsening, while inflation continues to run at 26-year highs. As I have commented earlier, this is as classic as it gets regarding the definition of stagflation : stagnant or slowing economic growth in a time of rising inflation.

Sure, biotech manufacturing is subject to some "lumpiness" as equipment needs to be cleaned and re-setup for the next batch of medicines, but a 48.5% drop year-on-year? This is as good as "falling off the cliff", a sinking sensation that many in the peakoiler community are very, very familiar with. And electronics? 16 consecutive drops in 16 months. They could be trying for some kind of record here, together with semiconductors. A very ugly picture, especially given that inflation is still ongoing, and crude oil continues to set new record highs regularly.

This is the kind of situation that can lead to restlessness amongst the population, and in extreme cases descend into disorder and chaos and in fact it already has in some countries. You can be very sure that the government has got to be very concerned about it. Meanwhile, as an individual, in order to hedge against slowing economic growth, you might want to look into getting a job in a traditionally defensive sector, such as government, military, education, healthcare, and such. And as an investor, in order to hedge against inflation, what you can do is to buy into commodities, hold on to them, and sit tight. Gold and oil and uranium and food and other resources are going higher. Much, much higher. We ain't seen nothing yet.

(2008-06-27 13:07:24 SGT) [Biz] Permalink

Crude oil hits $140.39 record on NYMEX as Libya warns of output cut

This article belongs to the NYMEX crude oil price records story arc.

bloomberg.com :

Crude oil jumped above $140 to a record as Libya threatened to cut output, OPEC's president said prices may reach $170 by summer and the dollar weakened. Libya which produced 1.85 million barrels of crude oil per day last year (2.2% of global supply), may curb output because of a US law that allows terror victims to seize assets of foreign governments as compensation. Oil, gold and copper climbed as the dollar dropped because the Federal Reserve gave no signal of higher interest rates. Crude oil futures for August delivery on the New York Mercantile Exchange [NYMEX] touched $140.39 today [26 Jun 2008], surpassing the previous $139.89 record.

- This is starting to become a regular occurrence again - waking up over here in Singapore to a new crude oil record in overnight action on the NYMEX exchange. Taking a look at the various factors (or excuses as I like to term them) that the media has attributed to crude's rise, a peakoiler like msyelf cannot help but notice that the reason du jour has just switched from "speculators" to "Libya".

While the dollar factor is still mentioned and does constitute one component, you have to take a look at the charts to apreciate the divergences and ironies therein. USDX, the US dollar index, is currently floating around 72-odd, down from recent strength when it hit 74 resistance and turned back. But then, back in mid-March 2008, USDX was even lower, floating around 71 and close to 70 support, while crude oil was "only" $110 at that point. So, let's see : 71 USDX = $110 oil, while 72 USDX = $140 oil? Well, so much for the dollar factor.

Since we are talking support and resistance, a technical analysis of the crude oil charts is in order. We have been in a back-and-forth trading range throughout most of the June sessions, yo-yo-ing in a consolidation rage from just above $130 to just below $140. Fellow peakoiler simontay78 has likened it to a "shuttle run" - I think that's quite an apt description. This latest $140.39 record represents a breakout above this consolidation range and clears the decks for a run to the next resistance level which is $150. Beyond that, the subsequent resistance levels remain at $180, $200, $300 and way over $400. Support levels are at roughly $10 intervals at $130, $120, $110 and $100, and as a consumer it rather pains me to say this, but we might not really be able to count on the last 2 to come about.

Oil is in a bull market. We're going to $150 and beyond.

(2008-06-27 07:58:07 SGT) [Energy] Permalink

Thursday June 26, 2008

Singapore CPI inflation rate for May 2008 continues at 26-year high of 7.5%

This article belongs to the Singapore inflation watch story arc.

bloomberg.com :

Singapore's consumer prices rose at a slower-than-expected pace last month [May 2008], reducing the need for further currency gains to rein in inflation. The consumer price index [CPI] jumped 7.5% from a year earlier, matching April's 26-year high record, the Department of Statistics said [23 Jun 2008]. The Monetary Authority of Singapore [MAS] had forecast a 5-6% inflation rate for 2008. The central bank has allowed its currency to strengthen against the US dollar, saying the exchange rate remains its most effective tool to fight inflation.

- The Singapore inflation rate is reportedly stabilizing and analysts are already predicting that it will come down in the second half of 2008. Singapore M3 money supply figures also appear to be stabilizing around the 12-13% level in the past half year, down from a high of 23.62% in 2007. But the money supply growth rate is only half the story - the other half is its relationship to the growth of available goods and services in the economy. For the inflation rate to be stable, economic growth has to at least keep up with money supply growth. With a looming global economic slowdown and imminent worldwide recession, the economic growth factor is the big wildcard.

Gold and crude oil prices may have paused from breaking new all-time record highs for the time being, but the inflationary storm is far from over as yet. We may only be passing through the eye of the hurricane here - just when people start to get lulled into complacency, the winds of inflation could well pick up with renewed force - perhaps even stronger than ever. We need to remain vigilant against inflation. This is no time to let down your guard yet.

(2008-06-26 00:17:04 SGT) [Biz] Permalink

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