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Wednesday, March 30, 2016

April Prediction of Pump Oil Price (Ron 95)

**It is easier to predict the direction of fuel price than to estimate amount of swing of fuel price due to the government REFUSING to disclose the compute mechanism.**

This is the 9th time I'm posting my prediction in a blog posting. Please bare that I will repeat some lines for new readers :) Also I always care to post my predictions before any official news or other analysts have given their views (typically too late after the queue starts at the stations).

Why is this sort of important? Say every month you know ahead of official price announcement and let's assume there is a price swing on average of 10 sen per month and you can fill in 35 litres. 0.10 x 35 x 12 = RM 42 savings a year. Obviously you don't feel it's a lot but every year you will always call and beg for credit card waiver of RM50 on govt service charge? Ironic isn't it? :) My total savings for 2015 is: RM 50.75 and YTD: -RM 1.75.

April 2016
Short update for this month as I am not feeling well these days. Oil rallied to around $40 per barrel largely due to oil talks between Russia and Saudi to cut production to boost price and with America's oil inventories dwindling.

However MYR got a boost as foreign investors are bringing funds back into Malaysia. See the news today: Foreign funds have poured about RM4.4 billion into Malaysian equities in 2016.

Some asked why did the price of crude oil drop in 2015?
- Strong US dollar; all commodities are priced in dollar and that includes oil.
- Organization of Petroleum Exporting Countries (OPEC); refuses to cut production in order to maintain market share.
- Oversupply of crude oil; thanks largely to US shale oil producers which is now the world's biggest swing producers.
- Declining demand; world's no.2 economy China is slowing.
- Iran nuclear deal; removes Western sanctions and thus allowing country to export oil once again.
- Successful Paris climate change breakthrough talks; marks the beginning of the end of the fossil fuel age.

How come our pump fuel price did not drastically drop in 2015? 
- This is primarily due to weakening MYR to the USD.

Aboi's April'16 Prediction Analysis

RM/L between Feb and Mar jumped almost 15%!: 1.23 (Feb) vs 1.41 (Mar). Oil price edged up from $35 to $41 (17%) but this cannot be offset by stronger MYR (4.17 -> 4.08), of only 2.15% gain. As such I will predict that fuel price will be increased to RM1.75 for RON95 (a jump of 15 sen). Price highly NOT likely to go down so fill your tank before 1st of April 2016 (Friday).

**There is an uncertainty however. Back in May 2015 when two 'buy' elections were held prices were expected to increase but did not. The same thing could happen because of the looming Sarawak state elections so it's a 50/50 chance. Nevertheless there is no harm to fill it earlier as explained above**

Below is a table of my previous predictions way back to the beginning of 2015. My predictions are based on Tapis crude oil price, performance of Ringgit (added after Mar) & domestic politics (which was added after May). My total savings to date: RM 50.75. As for YTD: -RM 1.75.

**It is easier to predict the direction of fuel price than to estimate amount of swing of fuel price due to the government REFUSING to disclose the compute mechanism.**


stargazenexus said...

so what's the prediction for may 2015?

Intelligent Investor said...

I will post it either tonight or tomorrow. Stay tuned.

Intelligent Investor said...

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