2.6823. Ringgit crashed...
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Oil price: Opec 'will let oil price fall below $40'
Chancellor George Osborne says that overall falling oil prices are a 'very good thing'
LAST UPDATED AT 12:26 ON Tue 16 Dec 2014
As the price of Brent crude fell below $60 for the first time since 2009, the most powerful nations in Opec have made clear that they are willing to push prices as low as $40 a barrel in their bid to take on Russia and US shale, a high-profile Gulf oil minister said this week.
Suhail al-Mazrouei, energy minister of the United Arab Emirates, said that the organisation will let prices fall by more than $20 per barrel before they consider an emergency meeting to cut production.
"We are not going to change our minds because the prices went to $60, or to $40," he said.
Brent crude, the global benchmark, fell by more than a dollar to $59.75 a barrel today, the BBC reports, while the price of US crude dropped to $54.85.
Tumbling prices have already had a profound impact around the globe, including in Britain where three times as many UK oil and gas firms have declared insolvency this year compared with 2013.
A report published on Monday by Moore Stephens, a UK accountancy firm, said that 18 UK oil and gas businesses became insolvent this year compared with just six in 2013, The Guardian reports.
Jeremy Willmont at Moore Stephens said: "The fall in the oil price has translated into insolvencies in the oil and gas services sector remarkably quickly. The oil and gas services sector has enjoyed very strong trading conditions for the last 15 years, so perhaps they have not been quite so well prepared for a sustained deterioration in trading conditions as other sectors would have been."
According to Willmont, expectations that prices will remain low for some time are fuelling the insolvencies: "There was a sharp drop in the oil price during the financial crisis, but the sense that oil prices could be depressed for some time is much more widespread this time around."
But George Osborne said that falling oil prices are "overall a very good thing", adding that the effect would be a "net positive" for both the US and the UK.
"We have important oil and gas industries in the US and the UK but nevertheless this is a big boost for American and British consumers and businesses," Osborne said at an address to the Economic Club of New York.
The Paris-based International Energy Agency recently slashed its forecasts for growth in demand for oil in 2015 by 230,000 barrels to 93.3m barrels per day. The estimations of the US Energy Information Administration are even more pessimistic; last week the department reduced its forecast demand growth for 2015 to 92.8m barrels per day.
Read more: http://www.theweek.co.uk/business/o...ill-let-oil-price-fall-below-40#ixzz3M6WgPlFN
Chancellor George Osborne says that overall falling oil prices are a 'very good thing'
LAST UPDATED AT 12:26 ON Tue 16 Dec 2014
As the price of Brent crude fell below $60 for the first time since 2009, the most powerful nations in Opec have made clear that they are willing to push prices as low as $40 a barrel in their bid to take on Russia and US shale, a high-profile Gulf oil minister said this week.
Suhail al-Mazrouei, energy minister of the United Arab Emirates, said that the organisation will let prices fall by more than $20 per barrel before they consider an emergency meeting to cut production.
"We are not going to change our minds because the prices went to $60, or to $40," he said.
Brent crude, the global benchmark, fell by more than a dollar to $59.75 a barrel today, the BBC reports, while the price of US crude dropped to $54.85.
Tumbling prices have already had a profound impact around the globe, including in Britain where three times as many UK oil and gas firms have declared insolvency this year compared with 2013.
A report published on Monday by Moore Stephens, a UK accountancy firm, said that 18 UK oil and gas businesses became insolvent this year compared with just six in 2013, The Guardian reports.
Jeremy Willmont at Moore Stephens said: "The fall in the oil price has translated into insolvencies in the oil and gas services sector remarkably quickly. The oil and gas services sector has enjoyed very strong trading conditions for the last 15 years, so perhaps they have not been quite so well prepared for a sustained deterioration in trading conditions as other sectors would have been."
According to Willmont, expectations that prices will remain low for some time are fuelling the insolvencies: "There was a sharp drop in the oil price during the financial crisis, but the sense that oil prices could be depressed for some time is much more widespread this time around."
But George Osborne said that falling oil prices are "overall a very good thing", adding that the effect would be a "net positive" for both the US and the UK.
"We have important oil and gas industries in the US and the UK but nevertheless this is a big boost for American and British consumers and businesses," Osborne said at an address to the Economic Club of New York.
The Paris-based International Energy Agency recently slashed its forecasts for growth in demand for oil in 2015 by 230,000 barrels to 93.3m barrels per day. The estimations of the US Energy Information Administration are even more pessimistic; last week the department reduced its forecast demand growth for 2015 to 92.8m barrels per day.
Read more: http://www.theweek.co.uk/business/o...ill-let-oil-price-fall-below-40#ixzz3M6WgPlFN
I believe Malaysia's central bank has run out of money to defend the weakening RM. From the exchange rate and oil price charts, it seems more weakening ahead if you note the trend from Sep onward. 1 SGD = 3 MYR is a strong possibility by Q1 2015.
http://www.xe.com/currencycharts/?from=SGD&to=MYR&view=1Y
http://www.nasdaq.com/markets/crude-oil-brent.aspx?timeframe=1y
A lot of big budget projects and subsidies will be slashed if the weakening continues to Q2 2015. I don't think Malaysia can afford to raise interest rate significantly as it will be implementing GST in Apr 2015, which will slow down the economy for next few quarters. Moreover the government cannot gain directly from the higher interest rates. Higher taxes or selling off assets seem to be the other options.
Oil falls through another support
Analysts warn of more price volatility, highlight how plunging prices can hurt capital markets
By Andrea [email protected]@AndreaSohBT
17 Dec 5:50 AM
Singapore
ANOTHER day, another psychological support level for oil breached - as international crude Brent fell below US$60 a barrel to as low as US$59.02 for the first time in five years.
Analysts continue to warn of more volatility in oil prices, even as they highlighted how plunging oil prices can negatively impact some parts of capital markets.
In a note on Monday, ABN Amro senior energy economist Hans van Cleef said: "We think that the drop in oil prices went too fast and too far. We expect that prices will stabilise and start to rebound within several weeks."
But the downside risks for oil prices remain "very large", he said.
Given declining market liquidity ahead of the holiday season, what can also happen is "unexpected and large swings in oil prices in a single day, without a clear or identifiable reason", he added.
Poor manufacturing data from China on Tuesday added to concerns about weakening demand.
The flash manufacturing purchasing managers' index (PMI) from HSBC/Markit fell to 49.5 for December, signalling the first contraction in seven months. A reading of 50 marks the threshold between expansion and contraction.
The US crude benchmark WTI fell to as low as US$53.80 a barrel in intra-day trading on Tuesday.
The floor could be as low as US$50 a barrel for Brent, and US$40 for WTI, said analysts.
A tumble in emerging market currencies and assets added to jittery nerves too. The Russian central bank hiked its benchmark interest rate to 17 per cent from 10.5 per cent, after the rouble fell to a record low against the dollar. Assets such as Venezuela bonds and Thai stocks also sank.
In Singapore, the benchmark Straits Times Index dropped almost 80 points to close at 3,215.09, down 2.4 per cent.
Crude oil prices have fallen about 45 per cent since June, as a supply glut due to record production in the US coincided with slowing demand. The Organization of the Petroleum Exporting Countries (Opec) decided to maintain production at 30 million barrels a day at its meeting in late November in order to maintain market share.
The continued pressure on the oil price could have repercussions for capital markets. Some US$1.5 trillion have been invested in shale production in the US in the past three to five years, said Saxo Capital Market's Asia macro strategist, Kay Van-Petersen.
With some of these oil producers facing increasing risks of a default, stress in the credit sector should eventually also spill over into equities, he said. "In a situation like that, investors just throw everything out and go back once things are settled in to figure out which players have been prudent and more conservative in their balance sheets as well as operational efficiencies."
On a brighter note, the decline in the oil price could translate into higher growth for the Asia-Pacific - if the boost in disposable income is spent.
Paul Gruenwald, Standard & Poor's Asia-Pacific chief economist, said in a note on Tuesday: "Spending the windfall can raise GDP in key economies while saving it will provide little or no stimulus to growth."
If spent, the Philippines, Hong Kong, China and Thailand stand to benefit the most, with output being raised by at least 0.3 per cent, he said. The effect on India and South Korea will be around 0.2 per cent. For other economies in the region, he thinks the oil price fall will have limited impact.
The Organisation for Economic Co-operation and Development (OECD) has estimated that a US$20 drop in price would add 0.4 percentage point in growth to developed countries after two years.
http://www.businesstimes.com.sg/energy-commodities/oil-rout/oil-falls-through-another-support
Analysts warn of more price volatility, highlight how plunging prices can hurt capital markets
By Andrea [email protected]@AndreaSohBT
17 Dec 5:50 AM
Singapore
ANOTHER day, another psychological support level for oil breached - as international crude Brent fell below US$60 a barrel to as low as US$59.02 for the first time in five years.
Analysts continue to warn of more volatility in oil prices, even as they highlighted how plunging oil prices can negatively impact some parts of capital markets.
In a note on Monday, ABN Amro senior energy economist Hans van Cleef said: "We think that the drop in oil prices went too fast and too far. We expect that prices will stabilise and start to rebound within several weeks."
But the downside risks for oil prices remain "very large", he said.
Given declining market liquidity ahead of the holiday season, what can also happen is "unexpected and large swings in oil prices in a single day, without a clear or identifiable reason", he added.
Poor manufacturing data from China on Tuesday added to concerns about weakening demand.
The flash manufacturing purchasing managers' index (PMI) from HSBC/Markit fell to 49.5 for December, signalling the first contraction in seven months. A reading of 50 marks the threshold between expansion and contraction.
The US crude benchmark WTI fell to as low as US$53.80 a barrel in intra-day trading on Tuesday.
The floor could be as low as US$50 a barrel for Brent, and US$40 for WTI, said analysts.
A tumble in emerging market currencies and assets added to jittery nerves too. The Russian central bank hiked its benchmark interest rate to 17 per cent from 10.5 per cent, after the rouble fell to a record low against the dollar. Assets such as Venezuela bonds and Thai stocks also sank.
In Singapore, the benchmark Straits Times Index dropped almost 80 points to close at 3,215.09, down 2.4 per cent.
Crude oil prices have fallen about 45 per cent since June, as a supply glut due to record production in the US coincided with slowing demand. The Organization of the Petroleum Exporting Countries (Opec) decided to maintain production at 30 million barrels a day at its meeting in late November in order to maintain market share.
The continued pressure on the oil price could have repercussions for capital markets. Some US$1.5 trillion have been invested in shale production in the US in the past three to five years, said Saxo Capital Market's Asia macro strategist, Kay Van-Petersen.
With some of these oil producers facing increasing risks of a default, stress in the credit sector should eventually also spill over into equities, he said. "In a situation like that, investors just throw everything out and go back once things are settled in to figure out which players have been prudent and more conservative in their balance sheets as well as operational efficiencies."
On a brighter note, the decline in the oil price could translate into higher growth for the Asia-Pacific - if the boost in disposable income is spent.
Paul Gruenwald, Standard & Poor's Asia-Pacific chief economist, said in a note on Tuesday: "Spending the windfall can raise GDP in key economies while saving it will provide little or no stimulus to growth."
If spent, the Philippines, Hong Kong, China and Thailand stand to benefit the most, with output being raised by at least 0.3 per cent, he said. The effect on India and South Korea will be around 0.2 per cent. For other economies in the region, he thinks the oil price fall will have limited impact.
The Organisation for Economic Co-operation and Development (OECD) has estimated that a US$20 drop in price would add 0.4 percentage point in growth to developed countries after two years.
http://www.businesstimes.com.sg/energy-commodities/oil-rout/oil-falls-through-another-support
OK, probably it is good to remit MYR with oil price now at $60. The oil price range should hover around $50 to $60...
Maybe if oil hits $50, MYR will be around 2.85?
Maybe if oil hits $50, MYR will be around 2.85?
How to perfectly time the remittance rate? Best to do progressively in small amounts
Maybe around that level. If OPEC wants to fully crush US' oil supplies, then oil price could go lower towards $40/bbl and RM could weaken towards 3.00. Malaysia is also affected by low palm oil price
FWIW, Robin Ho predicts crude will hit 20year trendline of $47 before rebounding.
Those who took up DIBS loan benefit the most.:(
Bad for mm2h applicants.
Noon time at Bdk int already MC 2.65
2.70 coming soon.
Oil below US$59 as producers keep pumping
Opec members which backed output cut in Nov meeting are showing a change of heart
18 Dec 5:50 AM
London
BRENT crude oil fell below US$59 a barrel on Wednesday, near 5 1/2-year lows, as major oil producers signalled that they would maintain output despite a supply glut and faltering demand in Russia and Europe.
Core Gulf Opec (Organization of the Petroleum Exporting Countries) members have said that they are prepared to wait as long as a year for the market to stabilise, undercutting hopes they will step in to stem crude price losses.
Oil prices have almost halved over the last six months as increasing volumes of light, high-quality crude from North American shale have overwhelmed demand. "Every day now you have some Gulf Opec member actively trying to talk the market down," said Olivier Jakob, oil analyst at Petromatrix. "Opec is trying to choke US oil producers."
Brent for February was down by US$1.20 to US$58.81 a barrel at 1238 GMT. The January Brent contract, which expired in the prior session, hit a low of US$58.50 on Tuesday, its weakest since May 2009.
US crude dropped by US$1.70 to US$54.23 a barrel, after touching its lowest since May 2009 at US$53.60 on Tuesday.
On Wednesday, Iraqi Kurdistan government officials said that Iraqi crude oil exports to the Turkish port of Ceyhan could reach 800,000 bpd (barrels per day) next year, higher than previously announced. Oil shipments from Angola, Africa's second-largest exporter, are also set to increase in February to 1.86 million barrels per day.
Russian Energy Minister Alexander Novak has said that Moscow will not cut output in 2015, even if pressure on its finances rises with the economy showing signs of severe stress.
"Russia not cutting adds to the downside pressure and leaves the focus squarely on US shale producers' ability to obtain finance and carry on producing at current levels," said Ole Hansen, head of commodity strategy at Saxo Bank A/S.
In the United States, crude inventories rose by 1.9 million barrels last week, compared with analysts' expectations for a decrease of 2.4 million barrels, data from the American Petroleum Institute showed on Tuesday.
Analysts said that stock data from the US Energy Information Administration due on Wednesday could also weigh on market sentiment. "Unless we see a huge drop in US stocks . . . it will be bearish," said Carsten Fritsch, an analyst with Commerzbank.
Opec members which backed an output cut at the group's meeting last month are coming around to the view of Saudi Arabia that they need to focus on market share, further reducing the chance of any action to defend prices.
While Venezuela - which campaigned for output cuts in the run-up to the Nov 27 meeting - has continued to call for measures to prop up prices, other nations which usually back such action, such as Iran and African members, have been silent. "The producers have not blinked. We are just watching and selling oil at whatever the price is," said a delegate from an Opec country which in November had wanted an output cut.
This means there is greater unity behind the view of Opec's core Gulf producers, which signalled this week they are prepared to wait as long as a year to see the market stabilise.
Oil's fall from this year's peak of US$115 a barrel in June is particularly painful for countries such as Venezuela, Algeria and Iran, which need prices above US$100 to balance their budgets, according to estimates by the IMF and other analysts. REUTERS
http://www.businesstimes.com.sg/energy-commodities/oil-below-us59-as-producers-keep-pumping
Opec members which backed output cut in Nov meeting are showing a change of heart
18 Dec 5:50 AM
London
BRENT crude oil fell below US$59 a barrel on Wednesday, near 5 1/2-year lows, as major oil producers signalled that they would maintain output despite a supply glut and faltering demand in Russia and Europe.
Core Gulf Opec (Organization of the Petroleum Exporting Countries) members have said that they are prepared to wait as long as a year for the market to stabilise, undercutting hopes they will step in to stem crude price losses.
Oil prices have almost halved over the last six months as increasing volumes of light, high-quality crude from North American shale have overwhelmed demand. "Every day now you have some Gulf Opec member actively trying to talk the market down," said Olivier Jakob, oil analyst at Petromatrix. "Opec is trying to choke US oil producers."
Brent for February was down by US$1.20 to US$58.81 a barrel at 1238 GMT. The January Brent contract, which expired in the prior session, hit a low of US$58.50 on Tuesday, its weakest since May 2009.
US crude dropped by US$1.70 to US$54.23 a barrel, after touching its lowest since May 2009 at US$53.60 on Tuesday.
On Wednesday, Iraqi Kurdistan government officials said that Iraqi crude oil exports to the Turkish port of Ceyhan could reach 800,000 bpd (barrels per day) next year, higher than previously announced. Oil shipments from Angola, Africa's second-largest exporter, are also set to increase in February to 1.86 million barrels per day.
Russian Energy Minister Alexander Novak has said that Moscow will not cut output in 2015, even if pressure on its finances rises with the economy showing signs of severe stress.
"Russia not cutting adds to the downside pressure and leaves the focus squarely on US shale producers' ability to obtain finance and carry on producing at current levels," said Ole Hansen, head of commodity strategy at Saxo Bank A/S.
In the United States, crude inventories rose by 1.9 million barrels last week, compared with analysts' expectations for a decrease of 2.4 million barrels, data from the American Petroleum Institute showed on Tuesday.
Analysts said that stock data from the US Energy Information Administration due on Wednesday could also weigh on market sentiment. "Unless we see a huge drop in US stocks . . . it will be bearish," said Carsten Fritsch, an analyst with Commerzbank.
Opec members which backed an output cut at the group's meeting last month are coming around to the view of Saudi Arabia that they need to focus on market share, further reducing the chance of any action to defend prices.
While Venezuela - which campaigned for output cuts in the run-up to the Nov 27 meeting - has continued to call for measures to prop up prices, other nations which usually back such action, such as Iran and African members, have been silent. "The producers have not blinked. We are just watching and selling oil at whatever the price is," said a delegate from an Opec country which in November had wanted an output cut.
This means there is greater unity behind the view of Opec's core Gulf producers, which signalled this week they are prepared to wait as long as a year to see the market stabilise.
Oil's fall from this year's peak of US$115 a barrel in June is particularly painful for countries such as Venezuela, Algeria and Iran, which need prices above US$100 to balance their budgets, according to estimates by the IMF and other analysts. REUTERS
http://www.businesstimes.com.sg/energy-commodities/oil-below-us59-as-producers-keep-pumping
RM could potentially continue to weaken for another year.
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