Wednesday, December 08, 2010

Oil price hit 2 year high

Oil price is now at US$ 90 per barrel, a 2 year high, due to the weak US dollar and demand from China.  Petrol prices are expected to increase in Singapore. This will also impact on electricity prices and other cost of living. The prospects for the global economy is not good. It is in a mess, with no solution. Read my view here.
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3 comments:

ron said...

We can exeprience the effects of protectionism now.
Our taxi service is a form of protectionism:

Only citizens can apply for a taxi vocational license.

December 08, 2010 11:33 AM
Jamesneo said...

Oil is expected to increase much more next year:
http://news.xinhuanet.com/english2010/business/2010-12/08/c_13639353.htm

Singapore and the whole world are being complacent thinking that there will always be cheap oil to fuel the economy. Unfortunately,oil supply surplus is getting tighter and might even disappear by 2012. It is very likely that for the next decade we will be faced with many recessions or depression triggered by this permanent shortage of oil. As the oil price exceed a certain price, it will trigger another global recession like in 2008. This decrease the demand of oil temporary and the oil price drop allowing the economy to recover slightly. But price drop also reduce exploration efforts and also make the tar sands and other heavy oil less competitive and this will lead to the price to increase as the demand increase with recovery. But then the price reach a critical threshold again and the whole cycle continues.

My belief is that singapore will face an unprecedented crisis if this oil shock over the next decade destroy our tourism and retail sector as high oil prices is detrimental to the tourism sector.
http://www.parliament.nz/en-NZ/ParlSupport/ResearchPapers/4/6/a/00PLEco10041-The-next-oil-shock.htm

Mr Tan hope you take a serious look at these issues although i could not be 100% certain if things will play out as described.

December 08, 2010 1:36 PM
Unknown said...

Why is this bad news for Singapore ? I have seen all those refineries off Jurong. Singapore must make a fortune from oil refining and processing and when prices go up it means increased demand. Also Singapore has excellent public transport and journey distances are very short even if you do have to drive.

December 09, 2010 8:26 AM

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