Posted on 05/04/2006 3:25:01 PM PDT by familyop
THE price of crude oil is likely to remain high and volatile this year, averaging at between US$70 and US$80 per barrel, says CIMB Securities economist Lee Heng Guie.
Prices will remain high due to global concerns about the supply of the commodity, especially with the Western world's intensifying dispute with Iran.
Oil hit a record US$72.20 a barrel on April 18 as Iran defied pressure to halt its nuclear programme, raising fears of a cut in supplies from the world's fourth biggest crude exporter.
CIMB recently raised its crude oil price target, expecting an average of US$68 a barrel this year and US$60 next year.
Lee said prices could also surge closer to US$90 a barrel if there were further negative developments.
He said the higher oil price is generally positive for Malaysia given that it is a net exporter of oil and thus, stands to benefit from higher earnings. Crude oil accounts for about 5 per cent of exports.
"The Government will gain from higher petrol income tax collections, and Petronas can contribute more in terms of dividend," Lee told reporters on the sidelines of a conference organised by CIMB yesterday.
He said that if larger economies like the US, Europe or Japan slowed down because of the higher oil prices, Malaysia would inevitably be affected too.
He estimated that every increase of US$10 a barrel would have the potential to cut between 0.5-0.7 percentage points off Malaysia's economic growth.
Despite the high price concerns, he is maintaining his economic growth forecast of 5.3 per cent this year.
Supply fears, greedy Americans, the price of tea in China, whatever. It'll stay high because they know they have us over a barrel and will pay whatever they demand.
"Lee said prices could also surge closer to US$90 a barrel if there were further negative developments."
Cool, the bird flu will keep me home so I won't need to drive anywhere. I'll still be able to tune in and watch Bruce Willis destroy the asteroid that's headed this way.
it should test 97-ish; but it would be a flaming sell if it did, imho.
Todays price drop has them worried that they can't get there millions out of the oil market before they make less profit. So they conjure up a story like this. Anyone else notice this trend?
Did you see that the Socialist Paradise of Venezuela is having to buy oil on the spot market from Russia in order to meet it's contracts? Who would think that the nationalization of an industry by a Socialist government would effect production rates? Go figure.
No, and I don't think this story will move the oil markets.
LOL!
If the futures market is suppressed, that will just move volatility into the spot market.
One purpose of the futures market is to smooth out prices. If 'speculators' are buying oil because they think it will be worth more in the future, that raises the price now, but lowers the price in the future.
Thats it! Weve seen the top. Next stop $60 and stock market at new all time highs.
Good. I hope they climb even higher than that and stay up there. The more oil prices rise the more economically viable it becomes to develop alternative energy sources. And once it becomes profitable to invest in these, capitalism will take over and new technologies will flourish. Conversely, as long as oil is cheaper than any alternative and there is no free market incentive, we will never stop importing oil.
Yes, I do realize that this would hurt my wallet for a while. But skyrocketing gas prices are not only the most effective route to independence from foreign oil, they are the only route to independence from foreign oil.
I'm obviously getting stupid because I have no idea how that equation works.
Another story about raising margin requirements and speculation.
http://www.foxnews.com/story/0,2933,166038,00.html
A speculation premium of $15 on 85 million barrels sold per day adds up to some serious coin.
We keep being told that the high prices are a result of supply and demand, pure and simple, but do we really believe that, suddenly, economies like China's and India's are so strong they can compete head-to-head with us for a limited supply of oil? These are countries where the water buffalo is still a major source of agricultural power, fer Pete's sake!
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