Friday, January 15, 2016

Oil Prices Dive

Over the past two years, global crude oil prices have been in free-fall, and nobody seems to know when the bungee cord will catch.
In June 2014, you had to shell out $110 to buy a barrel of Brent crude. In the early part of 2015, that had dived to $60. Today, it costs $30 to buy a barrel of oil – a level not seen since 2004. It's a staggering slide.
And on two occasions, the price of crude had even slipped to just below $30. On January 06, 2016, the 13-member OPEC sold it at $29.71 a barrel. Then, six days later, oil price was down again. Brent crude, used as an international benchmark, fell as low as $29.96, but bounced back to trade at $30.22.
On that day too, Petronas opined that crude oil prices could average $30 a barrel this year, and warned of two to three more tough years ahead.
PM Najib Razak’s Budget 2016 unveiled in October last year, was based on the assumption of $48 a barrel – therefore, he is now compelled to amend, revise and recalibrate his budget. And according to Malaysian government estimates, the country risks losing RM300 million for every $1 per barrel drop!
With prices now below break-even costs for many producers, particularly in the once-thriving US shale patch, and the costly Canadian oil sands producers barely making $15 a barrel, an extended slump has caused financial pain to flare across the world, threatening corporate bankruptcies and fiscal strain. And not forgetting, massive job losses.
And it can get worse. Standard Chartered think the price of global crude oil can sink to as low as $10 a barrel. For them to even make such an insane prediction speaks volumes about the deteriorating fortunes of the O&G industry.  

At the Tournament of Champions (January 07-14, 2016) in New York, USA, Nicol David (left) couldn’t maintain her winning form when she lost to Egypt’s Nour El Sherbini 8-11, 5-11 and 6-11 in the semifinal on Wednesday.
A day earlier, the 32-year-old Penangite had prevailed over fifth seed Omneya Abdel Kawy of Egypt in the last-eight clash, and before that, she was victorious against Hong Kong’s Annie Au on Monday and England’s Victoria Lust on Saturday. ,
Malaysia’s other representatives – Delia Arnold was eliminated in the second round while Low Wee Wern suffered a first-round defeat.

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