Thursday November 05, 2009

Singapore inflation rate negative for 6 months as CPI falls to -0.4% in Sep 2009

This article belongs to the Singapore inflation watch story arc.

channelnewsasia.com :

Singapore's inflation rate as measured by the consumer price index (CPI) fell for the 6th consecutive month in Sep 2009. Data from the Statistics Department showed that consumer prices fell 0.4% from a year ago, mainly due to lower costs of housing, recreation and transport. Housing costs went down 2.5% due to lower electricity and gas tariffs, as well as cheaper liquefied petroleum gas. For the 9 months to Sep 2009, consumer prices rose 0.4% compared to a year earlier.

- Enjoy the current rate of inflation while it lasts. I said pretty much the same thing a while back. Now, with the Singapore property market apparently doing its recovery thing, and crude oil prices having bounced off the lows of $32.40 to test the $80 level currently, look out for the average rate of inflation to start picking up again in the near future.

As usual, it's a confluence of various factors. An obvious driver is the economic recovery factor, with money supply being a less obvious but equally important factor. If we're talking about real inflation, it does take two to clap : the money supply growth rate as compared to the economic growth rate. Or, vice versa, rate of decline, if that were the case. For now the current inflation rate is in negative territory, but with the torrent of money now starting to work its way into the economy, don't expect that to last too long. The inflation current may well come in and sweep people away by surprise. Watch for it.

See also :

1. Singapore CPI inflation rate hits 6.7% for Mar 2008, fastest in 26 years
2. Singapore CPI inflation rate for May 2008 continues at 26-year high of 7.5%
3. Singapore economy in recession, GDP contracts 6.3% in Q3 2008, MAS ends currency gain policy
4. Singapore inflation rate slows to 2.9% amidst recession and falling demand

(2009-11-05 12:04:05 SGT) [Biz] Permalink

Shell cuts 5000 jobs as 2009 Q3 profits down 73%, hit by falling oil prices

news.yahoo.com [1] [2] :

Shell, Europe's largest oil company by market value, said it was cutting 5,000 jobs to tackle the tough economic environment. Shell said 2009 Q3 net profits fell 73%, hit by falling oil and gas prices and refining margins, and Shell CEO Peter Voser warned of a slow recovery, amidst renewed fears the global economic recovery may be more protracted than thought, which could weigh on crude oil prices. Excluding one-off and non-cash items, Shell's 2009 Q3 profits came to $2.62 billion. Voser said his restructuring program was yielding results with operating costs lowered by $1 billion in the first nine months of 2009. Oil and gas production for the quarter was 2.93 million barrels of oil equivalent per day (boepd), flat on the same quarter of 2008.

- With the latest crude oil prices testing the $80 support/resistance level, and the Peak Oil factor that is usually left out of most discussions, it would be a challenge for oil majors like Shell to grow their oil and gas production volume which would in turn lead to the record-breaking profits of yesteryear. Sure, falling gas prices are welcome by most consumers but the flipside of the argument is that oil & gas companies have even less incentive to go out and search for new fields, which, as the peakoilers have been arguing, will lead to an even bigger crisis just as we are hitting the downside of the Hubbert Curve.

The crude oil price today may be $80 or thereabouts, but what society needs right now, believe it or not, are *rising oil prices*, in order to accomplish two things : a. to encourage consumers to move towards efficiency and alternative energy sources (such as the trio of solar, wind and nuclear), and b. to encourage producers to continue to put in the necessary investment to explore for new oil and gas reserves in order to tide us over the peak oil transition period.

See also :

1. Shell 2Q2006 profit rises 36% to $6.3 billion, but production falls
2. Shell posts record $25.4 billion profit
3. NYMEX crude oil falls more than $100 from Jul 2008 record on US recession, OPEC production cut delay
4. NYMEX crude oil recovers from $32.40 low after 2.2 mbpd OPEC production cut announced
5. NYMEX crude oil prices hit $80, gold prices trade near $1070.80 record high

(2009-11-05 07:40:05 SGT) [Energy] Permalink

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