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The fall in the oil price is the biggest thing to happen for six months

Hamish McRae
The Independent
30 November 2014

Every swing in commodity values has winners and losers, but here there are many more winners

The fall in the oil price is big. It is big in terms of the raw numbers, a decline on the Brent reference price from above $115 (£74) a barrel as recently as June, to below $73 on Friday. We are starting to see that feed through to heating oil and the price at the pumps. But more important is the impact it has on the world economy. This is the biggest single thing that has happened in the past six months – and it comes in the nick of time, making the recovery in the developed world much more secure. Whenever there is a big swing in prices there are winners and losers, but the winners far outnumber the losers.

The basic point here is that high energy prices are like a tax on global growth. The oil price affects all energy prices and the more money that flows to the producers, the less there is in the consuming nations to spend on other goods and services. Continue reading “The fall in the oil price is the biggest thing to happen for six months”

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Oil: The Good, the Better, the Ugly

Commentary
By Alen Mattich
Wall Street Journal
Nov 28, 2014

Oil prices have fallen a long way this year. They might fall much further still.

Crude prices have fallen 36% since their summer peak, then sent into a tailspin by the failure of OPEC, the cartel of oil producing countries accounting for 40% of global supply, to trim its output quotas. And history suggests prices can fall substantially further.

It’s worth bearing in mind that for nearly two decades to 2005, crude oil prices largely ranged between $20 and $40 a barrel in today’s money. The average inflation-adjusted price of West Texas Intermediate oil since 1970 is a little under $55 a barrel compared with a little under $70 now.

That’s not to say that’s how far they’ll drop.

A rapid technical snap-back is always a possibility. But the fundamentals seem stacked towards lower rather than higher prices for now.

Which will make for some interesting economic dynamics. Continue reading “Oil: The Good, the Better, the Ugly”

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How low can it go? Oil, gas prices in freefall as OPEC reels from US fracking

FoxNews.com
November 29, 2014

Drivers paying less at the pump due to free-falling oil prices can thank the U.S. energy boom for generating shale oil – and weakening OPEC’s ability to keep the cost of a gallon of gas high.

In just a matter of months, the price of a barrel of oil has dropped from more than $100 to about $70, and gas is now cheaper than it has been in years. But a recent report conducted for the American Petroleum Institute claimed oil would cost twice as much as it does now if it weren’t for America’s fracking boom, which wrings oil and natural gas out of shale miles underground.

But the next question could be whether the fracking industry can survive the low prices it brought.

“The shale boom is on a par with the dot-com boom,” Russian oil baron Leonid Fedun of OAO Lukoil told Bloomberg. “The strong players will remain, the weak ones will vanish.” Continue reading “How low can it go? Oil, gas prices in freefall as OPEC reels from US fracking”

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How corruption abroad threatens U.S. national security

Doyle McManus
Los Angeles Times
Nov 29, 2014

When the militants of Islamic State swept across Iraq last June, they numbered no more than 12,000 and they faced a U.S.-trained, U.S.-equipped Iraqi army that boasted some 200,000 troops.

And yet it was the Iraqi army that collapsed.

What happened? It was more than simply incompetence among Iraqi generals and ethnic tensions among the ranks. The hidden factor that gave Islamic State its victory was Iraq’s rampant corruption. The Baghdad government’s army had 200,000 troops on paper, but many were “ghost soldiers,” fictional troops whose wages went into their officers’ pockets. The unfortunate troops who showed up often lacked equipment and ammunition because their officers had sold it on the black market.

“I told the Americans, don’t give any weapons through the army — not even one piece — because corruption is everywhere, and you will not see any of it,” Col. Shaaban al-Obeidi of Iraq’s internal security forces told The New York Times this month. “Our people will steal it.”

We often look at corruption as a secondary issue in international affairs: as a moral problem that allows Third World governments to steal from their people and gets in the way of equitable economic development.

But the lesson of the collapse of the Iraqi army, an army built with $25 billion in U.S. aid, is this: Corruption isn’t only a moral issue; it’s a national security issue, too. Continue reading “How corruption abroad threatens U.S. national security”

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Only relief of the dreary 2014 UMNO General Assembly politics of fear, hate and lies is admission by Muhyddin that it will only take 2% shift in voter support to end six decades of UMNO rule

The only relief in the dreary 2014 UMNO General Assembly politics of fear, hate and lies is the admission by the Deputy Prime Minister and Deputy President, Tan Sri Muhyiddin Yassin that it will only take 2% shift in voter support to end six decades of UMNO rule in the country.

It is a reminder as to how close the UMNO/BN government would have been voted out in the 13th General Election in May last year, if the electoral process had been really clean, free and fair, minus all the constituency gerrymandering and the undemocratic abuses and malpractices in the country.

As Muhyiddin admitted, a loss of two per cent voter support will translate to Barisan Nasional being reduced from its 133 seats won in the 13GE to 103 federal states, less than half of the 222-seat Parliament – comprising 68 UMNO seats and 35 non-UMNO seats.

A loss of five per cent voter support would have slashed the total BN seats to 81, comprising 53 UMNO and 28 non-UMNO seats.
It is precisely because of this fear of losing Federal power which explains why the 2014 General Assembly is such a disappointment to Malaysians who had hoped that UMNO leadership would rise to the occasion to establish its claim to continued rule in Malaysia by articulating a vision for a better tomorrow for all Malaysians.

Instead, moderate, rational and patriotic Malaysians, whether Malays, Chinese, Indians, Kadazans, Ibans or Orang Asli, were subjected to a week-long torture of the politics of fear, hate and lies – holding out no uplifting vision for the future, whether for Malays or Malaysians. Continue reading “Only relief of the dreary 2014 UMNO General Assembly politics of fear, hate and lies is admission by Muhyddin that it will only take 2% shift in voter support to end six decades of UMNO rule”

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Passed over for promotions, Sarawak Dayaks seethe at civil service discrimination

by Desmond Davidson
The Malaysian Insider
30 November 2014

A list of promotions, purportedly in the Sarawak Road Transport Department, has sparked outrage among Dayak professionals and civil servants in the state over what they see as proof of discrimination against non-Malay Bumiputera in the federal civil service.

The list, which has been posted on a blog and on Facebook, names eight Malay enforcement officers as “berjaya” (successful) in securing promotions from the N27 scale to N32, while three Dayak officers were listed as “simpanan”, or reserve.

To Dayaks – as Sarawak’s indigenous people are called – the list confirms what they have felt all along and what has also been noted in the just-released Malaysia Human Development Report 2013 – that discrimination exists within the Bumiputera working in the civil service, with Malays given preference over natives.

The list was posted on November 25 on www.pengerindu.com, a blog on Dayak interests which has a wide following among Ibans, a branch of the Dayak people.

“Dayaks are only qualified to become ‘reserves’ until when? I fear the ‘tsunami of young Dayaks’ could undermine the Sarawak government if nothing is done to help the Dayaks,” wrote the author of the post, Mr J. Continue reading “Passed over for promotions, Sarawak Dayaks seethe at civil service discrimination”