price will go as high as US$200. It was a very long report on the
economy published in May 2008.
I believe this may have led to the sudden increase in the price of oil
recently.
If you read the facts carefully, you should come up with the
conclusion that the price of oil will not increase suddenly, but that
report put the figure up to the end of 2008 by using estimates that
are grossly exaggerated.
The demand for 2008 increases rapidly compared to 2007, while
production increases very little. These are just estimates based on
some factors quoted as the increase in demand due to the Peking
Olympics. Instead of increasing the use of Oil in Peking, the Chinese
government had prevented vehicles from travelling in major parts of
Peking.
With the sudden increase in the price of Oil, demand was curtailed
even faster. The report didn't take this into account seriously.
Even better things happen. Many nations, including Malaysia is
beginning to abandon the Subsidy mentality that afflicted ALL
developing nations, and slowly gear themselves towards the WELFARE
mentality of the developed nations.
Instead of giving money to the suppliers, governments are giving money
to the citizens.Indonesia has gone even further by giving money to all
citizens instead of just car owners as in Malaysia. No wonder there is
little protest in Indonesia.
Hopefully, more nations will achieve the developed status by realising
this simple fact. Follow the economic practises of the developed
nations instead of following the non-developed nations, if you want to
be developed. This lesson should be learned by Iran that is rich in
Oil and yet suffer from severe inflation as a result of too much
subsidy on Oil.
http://groups.google.com.my/group/soc.culture.malaysia/post?hl=en
Crude Oil Falls as Hurricane Dolly Misses Fields, Dollar Gains
By Christian Schmollinger and Nesa Subrahmaniyan
July 23 (Bloomberg) -- Crude oil fell for a second day in New York
after forecasters expect Hurricane Dolly to miss fields in the Gulf of
Mexico and the dollar rebounded, curbing investments in commodities.
Dolly is headed for northern Mexico and southern Texas, and the dollar
gained against the euro on signs U.S. interest rates may increase. Oil
futures have declined more than 15 percent from a record $147.27 a
barrel on July 11 as U.S. gasoline use fell for a 13th consecutive
week.
``There's a sense of relief from a hurricane track that keeps the Gulf
oil production in pretty good shape,'' said Gerard Burg, energy and
minerals economist with National Australia Bank Ltd. in Melbourne.
``We've seen that prices near $150 were near the top of what consumers
are willing to accept.''
Crude oil for September delivery fell as much as 87 cents, or 0.7
percent, to $127.55 a barrel, and traded at $127.82 at 1:55 p.m.
Singapore time on the New York Mercantile Exchange. Futures are up 71
percent from a year ago. The August contract expired yesterday after
declining 2.4 percent to $127.95 a barrel, the lowest settlement price
since June 5.
``That's been a realization to the market that prices reached the top
of what could be accepted in the short term,'' said National
Australia's Burg.
`Bears in Control'
The number of outstanding oil futures in New York dropped to the
lowest in 17 months as oil companies, refiners and institutional
investors exited the market. Open interest fell 2.6 percent July 21 to
1.23 million contracts on the Nymex, according to data from the
exchange.
``The bears have taken control for now and there are increasing
worries about demand growth,'' said Victor Shum, a senior principal at
Purvin & Gertz Inc. in Singapore. ``The market is very U.S.-centric,
and while the bill on speculation is nebulous, it may still take some
people out of the market.''
U.S. gasoline demand fell 3.3 percent last week from a year ago, the
13th consecutive weekly decline, as Americans react to record pump
prices by driving less, a MasterCard Inc. report yesterday showed.
Gasoline for August delivery fell 2.11 cents to $3.1259 a gallon in
New York at 12:20 p.m. Singapore time. Yesterday, it dropped 7.01
cents, or 2.2 percent, to $3.147, the lowest close since May 8.
Futures reached a record $3.631 a gallon on July 11.
Pump prices are following changes in futures. Regular gasoline,
averaged nationwide, fell 1.4 cents to $4.055 a gallon, AAA, the
nation's largest motorist organization, said yesterday on its Web
site. Pump prices reached a record $4.114 a gallon on July 17.
Hurricane Impact
Dolly strengthened over the Gulf of Mexico and became a hurricane.
Offshore fields in the Gulf are responsible for about 25 percent of
U.S. oil production. Sustained winds strengthened to 80 miles (1,320
kilometers) per hour, the U.S. National Hurricane Center said in an
advisory at 10 p.m. Houston time.
The storm is traveling northwest and the eye is expected to make
landfall about midday tomorrow.
Oil producers shut about 4.7 percent of production in the U.S. Gulf of
Mexico, as they evacuated personnel from 49 platforms and six rigs in
preparation for the storm, the government's Minerals Management
Service said yesterday.
Petroleos Mexicanos, the third-largest supplier of crude to the U.S.,
evacuated 66 workers from an oil platform in the western Gulf of
Mexico.
U.S. crude oil and fuel production plunged and prices rose to records
when hurricanes Katrina and Rita shut refineries and platforms as they
struck the Gulf of Mexico coast in August and September 2005. Katrina
shut 95 percent of offshore output in the region. Almost 19 percent of
U.S. refining capacity was idled because of damage and blackouts
caused by the hurricanes.
Dollar Gains
Brent crude oil for September settlement fell as much as $1.20, or 0.9
percent, to $128.35 a barrel on London's ICE Futures Europe exchange.
It was at $128.86 a barrel at 2:05 p.m. Singapore time.
Yesterday, it dropped $3.06, or 2.3 percent, to settle at $129.55 a
barrel yesterday, the lowest since June 5.
The dollar traded near a two-week high against the euro at $1.5795 at
12:07 p.m. in Singapore, after rising 0.9 percent yesterday and
touching the strongest level since July 10.
Senate Democrats cleared the first hurdle for legislation to curb
energy market speculation. Legislation won approval to proceed to
debate, in a 94-0 vote yesterday. Democrats said the measure could
reduce oil prices as much as 50 percent.
The legislation requires the Commodity Futures Trading Commission to
impose limits on speculative trading in oil and natural gas futures
markets. It also requires more reporting in energy markets to prevent
market manipulation.
U.S. crude-oil stockpiles probably fell last week as near- record
prices and low profit margins discouraged buying by refiners,
according to a Bloomberg News survey of analysts.
The Energy Department is scheduled to release its weekly report
tomorrow at 10:35 a.m. in Washington.
To contact the reporters on this story: Nesa Subrahmaniyan in
Singapore at nesas@bloomberg.net; Christian Schmollinger in Singapore
at christian.s@bloomberg.net.
Last Updated: July 23, 2008 02:11 EDT
