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.

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

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