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Tuesday, December 9, 2014

Oil Is At US$62 Per Barrel.



Oil already hit US62 per barrel today. Here is some news :
  • World oil prices slid another 4 percent to new five-year lows on Monday, as expectations of a deeper slump next year and a prediction by a core OPEC member that crude will remain at $65 for several months triggered another round of selling.
  • The chief executive of Kuwait's national oil company said oil prices were likely to remain around $65 a barrel for the next six to seven months, the latest indication that Gulf producers were content to ride out the latest rout.
Oil is going to hit US$60 per barrel. It may slip below. It is not likely that oil will recover for the next 6 - 12 months. Maybe for another 24 months.

I just found out at our power breakfast this morning that our Budget 2015 was based on US$110 per barrel. This means we are more than 40% off target.

In 1985, oil was trading at US$40 per barrel. Then it went down to US$10 per barrel. That caused a bad recession in Malaysia. Our Ringgit also fell against most major currencies. 

Now with oil trading so low we will be hit by another slowdown. Our Ringgit has touched RM3.50 against the US Dollar yesterday.

The team in Putrajaya does not have any clue about what is going to happen to the country. Prepare for some rough weather folks. It is so predictable in Malaysia.

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