November 2016
OPEC is trying to bring its members and non-OPEC producer Russia to agree on a coordinated cut to prop up the market, beset by a two-year glut in supplies, by bringing production into line with consumption. See link:
http://www.marketwatch.com/story/heres-how-ugly-it-could-get-for-stocks-if-opec-cant-reach-a-deal-2016-11-29. Anyhow I think the oil market is likely to remain oversupplied for some time yet even after the OPEC meeting, especially since U.S. oil production will soon start rising again. Price to remain subdued.
Emerging market assets have tumbled in general in the wake of Trump's upset win, as the dollar surged and U.S. Treasury yields jumped - Malaysian Ringgit is no exception. Also markets have been pricing in Trump's aggressive rhetoric on curtailing global trade with the U.S., which would disproportionately hurt trade-dependent emerging economies. To add salt to the wound our BNM's attempt to use moral suasion to support its currency threatens to backfire, increasing pressure on the ringgit and potentially hurting growth. Perhaps there is not much we can do since foreign-exchange reserves are uncomfortably low after having been run down in 2014 and increasing interest rates right now is politically suicidal for a possible GE14 next year.
http://www.marketwatch.com/story/heres-how-ugly-it-could-get-for-stocks-if-opec-cant-reach-a-deal-2016-11-29. Anyhow I think the oil market is likely to remain oversupplied for some time yet even after the OPEC meeting, especially since U.S. oil production will soon start rising again. Price to remain subdued.
Emerging market assets have tumbled in general in the wake of Trump's upset win, as the dollar surged and U.S. Treasury yields jumped - Malaysian Ringgit is no exception. Also markets have been pricing in Trump's aggressive rhetoric on curtailing global trade with the U.S., which would disproportionately hurt trade-dependent emerging economies. To add salt to the wound our BNM's attempt to use moral suasion to support its currency threatens to backfire, increasing pressure on the ringgit and potentially hurting growth. Perhaps there is not much we can do since foreign-exchange reserves are uncomfortably low after having been run down in 2014 and increasing interest rates right now is politically suicidal for a possible GE14 next year.
Aboi's Dec'16 Prediction Analysis
A Trump victory was not very good news for us and this was combined with a central bank that did not handle Ringgit volatility very well. MYR continues to slide downhill (4.17 to 4.32). Fortunately average oil price went down from $53.51 to $49.12 so the RM/L between October and November strengthen: 1.87 vs 1.78. I will predict that fuel price to be maintained @ RM1.95 for RON95. There is a remote chance it might be reduced by 5 sen.
Below is a table of my previous predictions since the beginning. My predictions are based on Tapis crude oil price, performance of Ringgit and domestic political matter. My total savings to date: RM 50.75. As for YTD: RM 12.00.
**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 exact compute mechanism.**
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