Oil price has risen to a new high of US$100 and this had sparks concerns all over the world. Here in Singapore, most of us are too familiar with what this can bring about. As witnessed in the past months, some of the phenomenon that can occur includes:

  • taxi fare hike – because the cost of diesel and/or petrol and/or natural gas has risen and taxi drivers are finding it hard to make a living
  • transport fare hike – costs of public transport will rise citing increased fuel costs
  • electric tariffs – electric bills will rise citing increase in cost of oil
  • airport surcharges – airport tax and air fare will rise citing increased fuel costs
  • dining – it’d be more expensive to eat out because of increase in LPG
  • ministers’ pay – their pay will go up citing increased cost of living

Of course, all these are just speculation and may not really happen. However, there’s something I am sure will remain constant – the people’s pay. However, if you are game for some go-down action, then I know of something that just might go down. Bonuses.

Have a jolly good 2008!

NEW YORK – OIL prices vaulted to a record US$100 a barrel on Wednesday as violence in Nigeria, tight energy stockpiles and a weaker dollar triggered a surge of speculative buying, dealers said.

Oil’s climb to the psychologically key triple-digit price helped send stocks tumbling on Wall Street and further darkened an already gloomy economic outlook in the United States, which has been battered by a housing crisis and credit crunch.

‘Oil hitting US$100 a barrel has sparked some concerns about the consumer and inflation,’ said Todd Salamone, vice president of research at Schaeffer’s Investment Research.

US crude traded once at US$100 a barrel, up US$4.02, before easing back to settle US$3.64 higher at US$99.62. It remains below the inflation-adjusted high of US$101.70 hit in April 1980, a year after the Iranian revolution.

London Brent crude rose US$3.99 to US$97.84.

‘Oil could rise further from here. It’s simple supply-and-demand fundamentals,’ said Kris Voorspools, energy analyst at Fortis in Brussels.

The White House said it would not open up the nation’s emergency crude oil reserve to lower prices.

Two members of the Organisation of Petroleum Exporting Countries said the cartel was powerless to bring the market down from its lofty height. Crude prices jumped 58 per cent in 2007, the biggest annual gain this decade. Oil prices have nearly tripled since 2000 – driven by rising demand in China and other developing countries, tight stockpiles and geopolitical turmoil.

Weakness in the US dollar has added to gains across the commodity sector as investors supported the underlying value of products denominated in the softening currency.

Wednesday’s price surge of more than 4 per cent came after suspected militant attacks in Nigeria’s main oil city, Port Harcourt, heightened concern over the potential for further disruptions in shipments from the world’s eighth largest oil exporter.

‘With the military and the militant warlords engaged in a violent tit-for-tat, the risk for oil disruptions in Nigeria remains higher than in the past few months,’ said Olivier Jakob of Petromatrix.

Frequent attacks by militant groups since February 2006 have driven thousands of foreign oil workers from the oil-rich Niger Delta and cut oil exports by about 20 per cent.

Investors are also particularly sensitive to signs of further fund investment in commodities at the start of the year. The broad Reuters/Jefferies CRB Index of commodities rose nearly 17 per cent in 2007 as the sector rebounded from a loss in 2006.

A further decline in US crude stockpiles – already running at a three-year low – was also expected. Weekly government data will be released on Thursday, a day later than usual due to the New Year holiday.

Stocks of crude in the United States were expected to have fallen 2.2 million barrels last week, the seventh straight week of decline, as refiners processed more crude, according to a Reuters poll. — REUTERS

 

Article obtained from straitstimes.com on 2rd January 2008



Reader's Comments

  1. Darrell | January 3rd, 2008 at 3:39 pm

    Happy New Year!

    I live in San Francisco and our cost have gone up
    more that 11% year over year. Our budget is
    simply to save a certain % of our income and
    spend the rest. Over the years it has worked for us.
    We own our house and a low debt on our rental house.

    I think the focus of all working people should
    be to save a certain % of your income and
    learn to live on the rest.

    Don’t worry about rising cost, think about
    how your money can work for you.

  2. Simply Jean | January 29th, 2008 at 1:08 pm

    @Darrell: happy new year! hmmm, not too sure how my (very little) money can work for me…

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