Singapore petrol prices drop by another 5 cents as NYMEX crude oil falls to $90

This article belongs to the Singapore inflation watch story arc.

channelnewsasia.com, petrolwatch.com.sg :

Caltex and SPC have kicked off another round of petrol price cuts, followed by Shell and Esso. Pump prices for all grades of petrol have gone down by 5 cents per litre on Tuesday [7 Oct 2008]. The latest revision follows a series of petrol price cuts since July this year, following a drop in crude oil prices.

- With the revision, RON92 is now $1.863 per litre, RON95 is $1.896, and RON98 is $1.970. Enjoy these prices while stocks last, and while crude oil searches for a bottom after dropping briefly below $88 earlier on. Watch out for a trend reversal and the next round of reflation as governments everywhere attempt to re-liquidate the cratering markets.

NYMEX crude oil rebounds off $87.56 low as governments respond to credit crisis

news.yahoo.com :

NYMEX crude oil for Nov 2008 delivery rebounded above $88 on Tuesday [7 Oct 2008] after falling as low as $87.56, dropping below $90 for the first time since Feb 2008. Oil prices have tumbled from a high of $147.27 in July due to a rising US dollar, and slowing demand in the US and other industrialized countries from high fuel prices and the financial crisis. China will skip gasoline imports in October for a second month due to heavy domestic stockpiles and a dip in demand.

Governments around the world scrambled for new measures to contain the fast-spreading credit crisis amid a cross-asset sell-off in stocks, bonds and commodity markets. Sweden, Austria and Denmark followed Germany's lead by offering blanket deposit guarantees to depositors. Iceland gave regulators sweeping powers as its currency fell 30%. In the US, more steps to shore up banks and ease pressure on the credit markets could be coming following the $700 billion bailout bill.

- Regular peakoil.com readers are probably watching the record-setting thread, now (temporarily) re-purposed as the "how low can it go" thread. So $147.27 has been the local maximum and the crude oil bulls seemed to have been banished and in fact many have turned bearish.

The calls out in the media are for $80 oil, $70, $50 oil, and a couple of them even had the audacity to suggest $30 and $20 oil, boldly proclaiming some kind of "hyperdeflationary scenario", if there is such a term. But really, "hyperdelusionary" might be more like it. People are acting like the global economy has already collapsed, and the money supply growth has gone negative. But if anything else, money supply is going up, not down, as governments embark on rate cutting, liquidity injections, and further intervention.

Dow Jones closes below 10,000 points for the first time since 2004

cnn.com :

The Dow Jones on Monday [6 Oct 2008] closed below 10,000 points for the first time since 2004, as US stocks followed Europe and Asia. Government bank bailouts on both sides of the Atlantic failed to stem slowdown fears. The Dow slumped more than 800 points during afternoon trading but a late rally saw it close at 9,955.50. The slides come on the back of days of unrelenting financial turmoil and despite US lawmakers agreeing a $700 billion bailout plan. Oil prices were lower, with NYMEX light crude oil for Nov 2008 delivery falling below $90 for the first time since Feb 2008 to settle at $87.81 a barrel.

- The Dow Jones index dropping below 10,000 points is a major psychological blow. The interesting thing is how it is now looking like the US stock markets seem to be following the Asian and European markets and not the other way round, like the proverbial tail wagging the dog.

But if you look at it from another, admittedly rather twisted point of view, if last week's 777-point drop in the Dow was "technical blackmail" for the US Congress to pass the $700 billion bailout package, then this Dow drop below 10,000 in conjunction with the world's markets falling off the cliff might just be the factor needed to push the world's central banks to embark on co-ordinated intervention efforts, i.e. interest rate cuts, massive liquidity injections and such. I wouldn't count it out - markets are known to do the most perverse things.

(2008-10-07 08:59:28 SGT) [Biz] Permalink

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