Singapore petrol prices lowered by 4 cents after NYMEX crude oil drops below $120

This article belongs to the Singapore inflation watch story arc.

channelnewsasia.com, petrolwatch.com.sg :

Singapore petrol pump prices saw another adjustment as the price of crude oil dropped further below US$120 a barrel. Diesel is now down by 6 cents a litre to $1.803, while petrol costs 4 cents less for all grades, compared to the cut of 10 cents on 28 Jul 2008. RON92 petrol is now $1.963 per litre, RON95 is $1.996, and RON98 is $2.070. In New York, crude oil prices on NYMEX have slumped almost 20% since hitting a record high of US$147.27 on 11 Jul.

- We've got 6-7 petrol price cuts in a row now. If nothing else, this should disprove the theory that petrol pump prices are fast to rise and slow to drop. $2 per litre looks like some kind of support level that has been broken, as does $120 crude oil.

With the Big Beijing Olympics Shutdown in progress, taking over 1.5 million out of 3.3 million cars off the roads and over 100 factories closed for this period, it would not be too surprising if crude oil were to float down to the subsequent support levels of $110 or perhaps even $100. On the forex side, the US Dollar Index [USDX] level of 74 is the key resistance level to watch, for now.

NYMEX crude oil falls to $118 as slowing economy dampens demand

bloomberg.com :

NYMEX crude oil fell for a third day, trading near $118 per barrel on concern slowing economic growth in the US and Europe will curb fuel consumption. Crude oil for September 2008 delivery fell to $118.00 yesterday [5 Aug 2008], the lowest since 5 May 2008 on the New York Mercantile Exchange [NYMEX]. Oil has lost more than $28 since touching a record $147.27 a barrel in New York on July 11 as unprecedented fuel costs prompted US consumers to limit spending. The Federal Reserve left interest rates unchanged at 2% yesterday amid weak economic growth.

- By some accounts, the US economy has already been slowing down since way back in 2006 or 2007 so that's not it. And for the past 3-4 months, the US Dollar Index [USDX] has been bouncing between 72 and 74, while oil prices have setting records back then. The Fed funds rate has remained at 2.00% since 30 Apr 2008 so that's not it, either.

So I will still tend to lean towards the Big Beijing Olympics Shutdown as one of the main reasons for the recent phenomenon of crude oil and many other commodities falling off the cliff, and I know I'm not the only one saying this. The 2008 Olympics are from 8-24 Aug so we've got a month or so to see if this thesis proves to be correct - or not.

(2008-08-06 14:28:11 SGT) [Energy] Permalink

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