March 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: RM3.50.

March 2016

Oil continues to stay within lower $30s. As long as there is no consensus to cut production and scale back supply price will stay suppressed. Other reads:
Why comments by Saudi Arabia’s al-Naimi slammed oil futures (see link)
Learn About The Oil Crisis (see link)

MYR strengthening and weakening back and forth almost following the swing of oil price if you compare carefully. The way I see it the only way for MYR to bounce back is [1] oil price recovers towards $50-$60 range [2] resolution of the 1MDB issues. As of now both are nowhere to be seen. Still I think this is about where MYR will stand (hard to imagine it will weaken to >4.5 so it's time to change foreign currencies back to MYR, hold cash and wait for "jualan harga murah". Other reads:
Will 2016 Bring a Bear Market? (see link)

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.

RM/L between Jan and Feb is not much of a difference 1.25 (Jan) vs 1.23 (Feb). Oil price edged up from $34 to $35 but this is offset by stronger MYR (4.36 -> 4.17). As such I will predict that fuel price will be maintained @ RM1.75 for RON95. Price should NOT go down but just to be on the safe side just pump anytime before 1st of March 2016 (Tuesday) whenever it is convenient for you.
**I still think the price should be RM1.65 for Feb and even so for March (because the mean and actual price delta is the highest I have ever seen), govt maybe trying to get subsidies from us. Perhaps the budget recalibration cuts wasn't enough so they cleverly offset it thru here. Just my 2 cents**

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 3.50.

**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.**