Monday July 04, 2005

Business paper frontpage : $60 oil

Singapore's national business newspaper The Business Times ran a front-page piece today titled "Profits at risk if oil hovers at US$60" (archive). Excerpts :

Economists and businessmen in Singapore are not all that worried about oil prices for now - but they could be if prices continue to hang around US$60 and threaten to eat into corporate profits.

Crude oil prices hit an all-time high of more than US$60 a barrel early last week, raising fears that they might hit US$70 soon. Although prices have eased somewhat, that might just be a temporary relief and prices could go up again if supply does not keep up with demand ...

- so, when do the words "Peak Oil" start hitting the front page, hmm? At $86? $105? $182? We'll see.

Oh, wait, we might not have too long to wait. "Chief respectable Peak Oil advocate" Matt Simmons is quoted in a separate article (archive) :

"We could be at US$100 by this winter. We have the biggest risk we have ever had of demand exceeding supply. We are now just about to face up to the biggest crisis we have ever had."

In yet another article (archive) today, $60 oil having seemed to have triggered off somewhat of a writing spree there, about Malaysia's need to re-think fuel subsidies :

The reality is simply this: the days of cheap oil may be over. If the subsidies are to be removed for the power sector, it will have to be removed across the board as well. That should include fuel prices and it will be unpopular. But it can be staggered over time as weaning the public off cheap fuel won't be easy.

Unfortunately, it will have to be done as it removes surprises, eradicates economic distortions and makes the broader economy more efficient. In the final analysts, spoon feeding, over a period of time, teaches us nothing but the shape of the spoon ...

- will someone please stand up and yell, "there is no spoon!" :)

- but seriously, "the reality is simply this: the days of cheap oil may be over", coming from The Business Times, is something. CXO's (CEO's, CFO's, etc.) read this stuff. Will that turn on a light bulb somewhere, perhaps? Hopefully, their first reaction would be a bit more useful than "buy XOM!!", lol.

(2005-07-04 21:50:53 SGT) [Energy] Permalink

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