Market Commentary 17th June 2008: Crude Oil prices set to fall? Harga minyak mentah dunia akan jatuh?

I see two possible scenarios unfolding in the near future that could lead the world Crude Oil prices to ease and perhaps fall drastically.

First, if the US Federal Reserve hikes up interest rate in the next Federal Open Market Committee (FOMC) meeting. Higher interest rate in the US will form a support for the weak US Dollar and give it some strength against other currencies. As you all know, the US Dollars and the commodities has an inverse relationship. That means, the falling US Dollars will be compensated by rising commodity prices. Rising US Dollars on the other hand will lead to falling commodity prices.

Second, if Saudi Arabia increases its oil production (or perhaps just rumours going around that they will increase production). If that actually happens, then we will be seeing falling crude oil prices. In fact, I read in a market report yesterday that they’ve agreed to raise production. Whatever it is, we’ll just wait for the OPEC meeting this 22nd June.

Man, at times like these, how I wish I had bought some Crude Oil contracts a year ago. Hahaha. So, instead of bickering about the ever-rising cost, I would instead be rejoicing over increasing wealth!

P.S. Yes, the accompanying photo of the aircraft is totally unrelated to this post 😉

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Disclaimer: This article is not a specific nor general advice on managing or investing your money. This article does not constitute a recommendation nor does it take into account your investment objectives, financial situation nor particular needs.

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About nadlique

This blog is about the journey of a 28-year-old Malaysian towards financial freedom. This blog was started back when the blogger was 21 years old. However, his journey towards financial freedom had begun way before that. Materials such as investing, business, entrepreneurship, equities, and real estate are presented. The author also posts his thoughts and observations on life in general.

Comments

  1. Lowering US Dollars on the other hand will lead to increasing commodity prices, and cause panic buying.

    hehehe

  2. Hehe. Well, hopefully, the Feds won’t cut the interest rate any more 🙂

  3. Another thing, even if the crude oil prices DO fall, I highly doubt that petrol prices in Malaysia will follow suit.

  4. Now our Hire Purchase Interest is adjusting upward wef 23 June 08…our BLR is following soon. Many will suffer…

  5. the end of price rises will be reached when we have total global recession when everyone is just too poor to pay for high oil prices and forced to cut back..

    the tipping point is still a little blip seen on the radar screen but all oil producers will reap wat they sow and everyone will suffer in the end for this huge oil bubble.

  6. Thiyagarajan says:

    what is the reason for falled crude oil price in 2008

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