Apocalyse Now: Regime of High Oil and Food Prices

[jpdm]

....Record high oil and food prices are hurting the economies of alot of nations including the Philippines...the spike in oil prices has dampened our stock market, consumption and manufacturing...our trade deficit has increased and businesses are scaling back their expansion...

....The spectacular rise of oil and food prices are also now triggering mass actions around the world...

....The world is bracing itself for an impending socio-economic slowdown..

Manila Standard
May 28, 2008
AFP with Othel V. Campos
RP firms start scaling back expansion plans

PHILIPPINE companies are shelving expansion plans, cutting capacity and easing up on hiring new workers as the US economic slowdown and record-high oil prices take their toll, the central bank said yesterday.
A poll of 1,258 firms among the country’s top 7,000 companies showed fierce competition and weak demand as “key risks to business activity” in the three months to June, the bank said in a statement.
While there were more respondents with a positive outlook than negative, the “overall confidence index” was down, “consistent with the broadly more cautious sentiment of businesses and consumers in many developed economies.”
Separately, the United Nations Food and Agriculture Organization said the Philippines’ import bill would kick up by up to 40 percent this year as a result of more expensive rice, wheat and dairy products.
That would translate into $3.45 billion this year from $2.5 billion last year.
“Surging prices of wheat, rice and vegetable oils will take their toll on import costs,” the UN agency said.
“Soaring international quotations are mostly responsible but also freight costs, which have nearly doubled for many routes.”
Last week, Economic Planning Secretary Augusto Santos said food and energy inflation likely capped economic growth to between 5.2 and 6.2 percent in the three months to March.

Manila Times
May 28,2008
G7, G20 Nations Urged To seek boost in Oil Output
AFP

PARIS: France called on the G7 on Tuesday to press oil-producing nations to boost their output in a bid to bring down prices that have reached record highs and thrown a spanner in oil-fired economies. Finance Minister Christine Lagarde said she would put the request to her counterparts of the Group of Seven club of rich countries to seek a common front with Britain, Canada, Germany, Italy, Japan and the United States.
“We cannot forever be in a market system in which the price is permanently on the rise, to the benefit of producers, who are building up major oil revenues,” Lagarde told France 2 television.
“I have decided to alert all of my G7 colleagues to discuss this issue, among consumer nations, and that we present it to producing nations,” she said.
Lagarde said she would ask the G20 group of emerging economies to join in the drive to bring down the price of the barrel, that hit a record high of $135 last week.
France has been rocked by nearly three weeks of protests by fishermen who have blocked ports, fuel depots and marinas to press demands for government aid to help cushion soaring fuel coasts.
While the protest movement appeared to be dying off in France after the government released aid, fishing fleets in Spain, Portugal, Italy and Greece launched action to press for assistance.

President Nicolas Sarkozy said in a radio interview that French consumers should brace for higher oil prices and that France was committed to developing alternative energy sources.

“The demand for oil products is getting stronger and stronger and supply is not increasing or very little,” said Sarkozy.

[ringostarr]

....Record high oil and food prices are hurting the economies of alot of nations including the Philippines...the spike in oil prices has dampened our stock market, consumption and manufacturing...our trade deficit has increased and businesses are scaling back their expansion...

....The spectacular rise of oil and food prices are also now triggering mass actions around the world...

....The world is bracing itself for an impending socio-economic slowdown..

yun mga walang delikadesang tao na nakipaglaro sa commodities and ignoring the possible consequences eh sigurado makakatikim kay nature

[pup2]

I just hope when the rioting starts, the rioters make sure that the speculators/rumor-merchants like * ***** ******* get creamed first.

[uls]

there are huge amounts of money moving electronically around the world.

they are looking for parking spaces where they can grow...

they used to be parked in stocks and bonds...

but when the US housing bubble blew up and banks stopped lending, these huge amounts of money fled their parking spaces coz if they stayed there, they will be destroyed (wealth destruction).

They found new parking space in the commodities markets.

Because of their size, and because the commodities markets are not that big, the massive inflow of money distorted the prices of commodities.

Analysts say the value of a barrel of oil should be around $80. It's $130+.

From Globe and Mail, Canada - May 28, 2008
"BCA Research says fair value for oil is $80 a barrel."

Speculators have distorted the price of rice.

It rose from $400 to $700 to $1,000 in a matter of weeks.

So eto tayo ngayon... mahal ang pagkain, mahal ang gas.

Humina ang economy natin.
http://www.gmanews.tv/story/98001/So...c-growth-to-52

The peso has weakened to almost P44 to $1. Maybe coz of strong demand for dollars. Importers need more dollars to buy more expensive oil and other commodities...

So what do we do now...

I don't know. Tiis.

[Flagg]

....The peso has weakened to almost P44 to $1. Maybe coz of strong demand for dollars. Importers need more dollars to buy more expensive oil and other commodities...

So what do we do now...

I don't know. Tiis.

You got it right as usual boss. Hindi lang stocks and bonds, pati hedge & mutual funds bagsak.

I hope bago things get worse, mag-implode yung mga speculators. Bale bibigay ang mga principals nila cuz of costs of living tapos they withdraw their funds from the pool na mina-manage nitong mga ito, decreasing their power.

Parang yung sa CALPERS. Mejo mahirap buhay ngaun sa Cali.

[Monseratto]

Nobody knows how this will end. Inflation is the bad word for the season. Economic activity will slow to alarming levels if things do not settle down.

Soaring food, oil prices drag Q1 economic growth to 5.2%

"We are experiencing an economic slowdown that is generally caused by inflation, which is caused by high oil and food prices... From where I'm sitting, I see no end to [these]," he said.

Santos also said that the economic slowdown abroad hit the Philippines harder than it did other Asian countries because the country is a heavy oil and fuel importer.

He also said that exports were weak in the first quarter because of the economic crunch in the United States, the Philippines largest export destination.

Former NEDA chief and University of the Philippines economics professor Cayetano Paderanga also expects a protracted economic slump for the Philippines.

"The slowdown was expected and will continue before things start to turn up. Most hope it could come mid to late 2009, but it could come late 2010," Paderanga said.

[uls]

Hindi lang stocks and bonds, pati hedge & mutual funds bagsak.

Mutual funds are regulated by the govt... they can only invest in stocks and bonds... so bagsak sila...

Hedge funds are not regulated. They can invest in anything. Most of them lost money in stocks so now they are trying to earn back the money in the commodities markets. Ginagawa nila fund raising ang commodities.

Pati pension funds pumasok sa commodities.

Look at what Calpers is doing:

MarketWatch - May 13, 2008
A recent move by pension giant Calpers to commit to raise their commodity exposure to $7 billion (from less than $400 million) underscores this growing ...

Dapat yung nasa commodities market yung talaga may balak na tumanggap ng delivery ng oil, grains, metals...

What the hell is a pension fund doing in the commodities market?!

[safeorigin]

well....things were somehow improving...there were a lot of rollback going on very recently which only means that the big 4 oil companies did took advantage of us this past few days...it only manifest that these were again one of the vile schemes of the arroyo administration (like the rice shortage) to divert our attention from their scandals of graft and corruption!!im thinking of what they will do next!

im getting sick and tired of their panloloko!!!i wonder if these people could still sleep at night!

well im not speaking of general terms here coz i know there are still government officials who were not yet polluted by corruption!kudos to them!

for those who were so corrupt and doing graft and corruption....dapat barilin kayo sa luneta!you're a disgrace to the filipino society!!
at sa mga mapagsamantala natin na kababayan sana kilabutan kayo!!!maawa kayo sa taong bayan!!!!may kunsensya p b kayo???Tama na itigil nyo na...we should be fair in our dealings to others pwede???sige kayo buhay pa kayo ay sinusunog na sa impyerno ang kaluluwa niyo...

i beg you all please lets be fair and just!!!!

what more could i say???God please heal our land!!

(btw this is not my post. i just let my cousin sit for awhile)

[uls]

well....things were somehow improving...there were a lot of rollback going on very recently which only means that the big 4 oil companies did took advantage of us this past few days...it only manifest that these were again one of the vile schemes of the arroyo administration (like the rice shortage) to divert our attention from their scandals of graft and corruption!!im thinking of what they will do next!

Waaat?

rice shortage a scheme of PGMA?

The price of rice soared early this year. Rice producing countries halted exports.

The Philippines imports rice. Nahirapan ang Pinas maghanap ng seller.

Halos nagpanic ang gobyerno.

[jpdm]

well....things were somehow improving...there were a lot of rollback going on very recently which only means that the big 4 oil companies did took advantage of us this past few days...it only manifest that these were again one of the vile schemes of the arroyo administration (like the rice shortage) to divert our attention from their scandals of graft and corruption!!im thinking of what they will do next!

im getting sick and tired of their panloloko!!!i wonder if these people could still sleep at night!

Me,too

well im not speaking of general terms here coz i know there are still government officials who were not yet polluted by corruption!kudos to them!

Yes. but most of them are polluted and beyond rehabilitation...sagad sa buto ika nga....

for those who were so corrupt and doing graft and corruption....dapat barilin kayo sa luneta!you're a disgrace to the filipino society!!
at sa mga mapagsamantala natin na kababayan sana kilabutan kayo!!!maawa kayo sa taong bayan!!!!may kunsensya p b kayo???Tama na itigil nyo na...we should be fair in our dealings to others pwede???sige kayo buhay pa kayo ay sinusunog na sa impyerno ang kaluluwa niyo...

i beg you all please lets be fair and just!!!!

you are correct.

what more could i say???God please heal our land!!

(btw this is not my post. i just let my cousin sit for awhile)

Ok lang. tama sabi pinsan mo..

[True Faith]

The LPG marketers and the oil companies just implemented a big time rollback for LPG and autolpg..

LPG is now priced between 470 to 570 pesos.

But the problem is, do the people have money to buy these fuel?

[valvura]

People, is the thread topic still relevant?

....Record high oil and food prices are hurting the economies of alot of nations including the Philippines...the spike in oil prices has dampened our stock market, consumption and manufacturing...our trade deficit has increased and businesses are scaling back their expansion...

....The spectacular rise of oil and food prices are also now triggering mass actions around the world...

....The world is bracing itself for an impending socio-economic slowdown..

Price of oil is no longer "high" considering it's price when this thread was started back in May 2008.

[SIZE=2]Oil falls to $55 on grim US economic outlook[/SIZE]

11/13/2008 | 11:31 AM

SINGAPORE - Oil prices slid to near $55 a barrel Thursday in Asia as more bad economic news from the US heightened fears of a severe global downturn that will pulverise demand for crude.

Light, sweet crude for December delivery was down 81 cents to $55.35 a barrel, after falling as low as $55.03, in electronic trading on the New York Mercantile Exchange by midmorning in Singapore.

"There are fears of reduced demand through 2009," said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore. "Market sentiment is extremely bearish. It seems like there's nothing that can stop the bears."

The crude futures contract overnight fell $3.50 to settle at $56.16, the lowest closing price since January 2007, after the US Energy Department slashed its 2009 oil consumption forecast.

The department said Wednesday it expects US consumption of petroleum to next year drop more severely than any time since 1980. The department's Energy Information Administration said 2009 petroleum consumption is projected to sink by 250,000 barrels per day, or 1.3 percent, more than twice that projected in its previous outlook.

Signs that US consumer spending has plummeted also fueled pessimism. Department store retailer Macy's Inc. said sales fell more than 7 percent in the third quarter and consumer electronics retailer Best Buy Co. slashed its fiscal 2009 guidance on fears that consumer spending will erode.

Morgan Stanley said it plans to cut 10 percent of staff at its institutional securities group_the bank's biggest business that covers everything from investment banking to stock trading.

"It's not just gloom and doom sentiment, it's indeed real," Shum said. "Companies are showing poor earnings and announcing major job cuts. There's a lot of bad news putting downward pressure on oil."

The grim company news helped send the Dow Jones industrial average down 4.7 percent Wednesday, and Asian stocks followed suit Thursday. Japan's benchmark Nikkei 225 index fell 5.1 percent, Hong Kong's Hang Seng index plunged 6.1 percent, and the Korea Composite Stock Price Index dropped 5.3 percent.

Oil traders have looked to stock markets for guidance on investor expectations about economic growth.

The Organization of Petroleum Exporting Countries, which produces about 40 percent of world supplies, has signaled it may cut production before its next meeting in December on top of a 1.5 million barrel reduction in output quotas last month.

"I think OPEC considers $50 a must-defend price," Shum said. "There are bullish elements that the market has been ignoring."

In other Nymex trading, heating oil futures fell 1.39 cents to $1.82 a gallon, while gasoline prices dropped 0.3 cents to $1.24 a gallon. Natural gas for December delivery slid 8.6 cents to $6.32 per 1,000 cubic feet.

In London, December Brent crude fell 41 cents to $51.96 a barrel on the ICE Futures exchange.

http://www.gmanews.tv/story/133231/O...onomic-outlook

[uls]

Though commodities prices have fallen, the global economic crisis is far from over.

as far as our country is concerned, the crisis is just beginning to affect us.

We may be happy with lower fuel prices, but our jobs and businesses are under threat.

Nobody knows how long this crisis will last.

Nobody can say for sure that their job or business won't be affected by the crisis.

If people and companies makes less money, and have less money to spend,

then it doesnt matter how low oil price falls...

the economy is still screwed.

[Eismann]

Uls is right, we're seeing slow down in the tech industries too. This means people are not spending on these unneccesary commodities. Jobs and businesses are under threat if this keeps up. We are far from the bottom of the recession. Here in our shores, it had just begun.

[uls]

tuwang tuwa ang mga tao sa pagbaba ng presyo ng fuel...

pero di nila inisip na ang rason ng pagbaba ay hindi dahil dumami ang supply.

Ang pagbaba ay dahil humina ang demand.

Very bad sign yan.

Ibig sabihin humihina ang global economy.

Akala ng mga pinoy hindi maapektuhan ang Pinas.

Malaki ang effect nito.

Just wait.

Nag uumpisa palang ang effect sa atin.

[Gen. Miting]

for every crisis, there is an equal opportunity.

during the oil price hikes, kung hindi ka talaga nagpa-efficient and nagpa-self sufficient, your business will die.

high costs and high price are brought about by too many inefficiencies in a system. address that problem and you can weather the crisis.

[ghosthunter]

OIL price at US$68 per barrel.

Anyone else worried?

[uls]

hanggang ngayon pinag iinitan parin nila ang oil dereg law

ano ba ang magiging difference ng reg sa dereg pag dating sa price ng imported oil?

wala

the oil suppliers don't care kung reg or dereg ka

basta kung ano ang prevailing market price, yan ang babayaran mo

reg and dereg will only affect things locally

reg will just make it harder for oil companies to do business (govt imposing price controls and other populist actions)

and that will reduce the number of players

[tidus1203]

Of course the commies and socialists are only blinded by their interest and can't see the bigger picture that oil is priced internationally. If the price in the world market is high you can't beg the market to please bring it down so you can afford it. The world markets don't care kung may mas mataas na magbabayad sa kanya ibenta.

[uls]

they refuse to see the bigger picture

pinag iinitan nila lagi ang mga oil companies

importer lang naman ang mga oil companies

namumuhunan lang mga yan

bumibili sa abroad, nagbebenta dito

ireg mo o idereg mo, it doesnt change the nature of the business

buy and sell parin

ano gagawin ng gobyerno?

i-dictate sa mga oil companies hanggang magkano lang pwede nila kitain?

mag buy and sell at cost?

mag buy and sell at a loss?