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Strategies & Market Trends : Asia Forum
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To: Stitch who wrote (7617)12/2/1998 5:20:00 AM
From: Michael Sphar  Read Replies (2) of 9980
 
Reflecting on tonight's Stratfor report:

<< Oil Producers' Threats to Flood Market May Force U.S. Response >>
Mexico/Venezuela/United States

Paints an immediately bleak picture for all OPEC and non-OPEC oil producing nations. If this MOTHER OF ALL GAS PRICE WARS continues as implied, there will be severe dislocations in the more marginal oil producing countries. Obviously supply exceeds demand. And since Asia turned down their collective demand due to the "Asian Crisis" in the years past that has only exacerbated the issue.

Do you see any sign of lowered gas prices in KL recently ? Any increase in its use, ie any stimulation to the local economy that lowered costs of gas and oil might be benefiting your part of the world ? Or is this a left hand/right hand thing given that Malaysia is also an oil producing nation ? Has the black gold lost its luster ? Will Harley hogs become the motorcycle of choice for cruising Malaysian highways and hinterlands ?

Here in Silicon Valley, the price of a gallon of gas has finally started to catch up with the drop experienced elsewhere in the US over last year. In my travels last week I noted that cheapest pump price in the local region was $1.02 per gal, discounting about 45 cents for various taxation interests, that means consumers around here are paying approx 57 cents a gallon raw gas. That's incredibly cheap compared to historical pricing vis a vis today's earning power.

Perhaps this is part of the benign deflation that "feels good" to the consumer, but masks the global pain of producer nations/regions. I recall a very astute poster on another thread, former New Zealand based oil engineering type claiming the earth to be awash in oil and that producers would have to endure production declines or per barrel revenue declines all this before the start of turmoil in Thailand leading to Asian Contagion. Seems like his far reaching forecast was right in spades.

Is there any good news in this ? Or am I just to feel guilty now that I can shave a couple bucks off each twenty I pay for a fill-up ? Seems like the sins of governmental guidance directing the invisible hands steering the oil producers are becoming exposed around the world. Now Stratfor is looking for US intervention to assist its beleaguered New World oil suppliers. Adam Smith where are you ?
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