Questions abt Oil

I had a question recently from a reader, so I've decided to answer his question in this entry, since I've been blogging so little and i think if any of you guys have a better understanding of the issue, do help him out. (Note: if you hv any idea, do leave a comment or send an email to me)
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I'm a Singaporean and currently very keen on understanding how much impact does the high oil price on singapore economy.

I suspect that the high oil price actually improve our economy instead of making it worst.

For example, I know that although many ASIA countries have bigger oil refineries than Singapore, but the country refining capacity can not cope with the local domestic demand and they have to import oil from various countries.

Singapore capacity is at 1.3m bbl and our domestic demand is only 700bbl and we are selling excess oil to other countries.

Can you help?

rgds
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Well firstly, I'm terribly sorry but my thesis is on the oil refinery industry in Singapore so I have relatively little knowledge to assist you in the sphere of oil prices affecting local economy. Even when it comes to the oil refinery, I have to admit that my thesis is sub-standard, not exactly the kind of book that makes you go "ahhhhh" in the library. Heh. I will try and answer all your questions to the best of my knowledge.

Firstly, Singapore has diversified her economy away from manufacturing and largely into service sector (such as finances, tourism, education, health etc etc). Even in the realm of manufaturing, there has been a move away from basic manufacturing towards higher advanced manufacturing that requires more technology and churn out more expensive stuff.
In short, there is a shift away from energy-intensive industries towards less energy needed sectors. Hence, in general, we are less sensitive to oil prices now due to the changed structural of our economy.

As for the impact of oil prices on the local domestic market, specifically to local inflation, I do not have a clear answer. Although record high prices are affecting our driving habits, I believe that it would not affect local inflation in a drastic way. I gathered this from some other studies of oil prices. Apparently, in developed countries, with higher income and more various options to spend their money, energy expediture has been reduced to a smaller percentage of a household total expediture. Since energy comprises a smaller share of the total expediture, the impact of a price rise has been relatively little.

Higher oil prices DO HELP our economy in one large way. High oil prices make it more profitable to explore and drill for oils in remote, hard-to-reach places, hence oil companies are more willing to fork out money to produce oil in these previously uneconomical oil-fields. Hence, they are now investing more on oil rigs, exploration equipment, and stuff like that on a global arena. Singapore has an active shipyard and many Singapore companies (Sembcorp, Keppal) are world players in this field. The Strait Times has been highlighting the many contracts and business they have acquired since oil prices increased.

As for the local oil refinery, Singapore's oil refineries serves to refine crude oil and export oil products to overseas markets. It is actually the 3rd largest oil refinery (not in actual size, but in geograpgical concentration) in the world.

Again, I could not give a analysed report on the impact of price. But in my thesis, I did a simple regression on RATIO of input and outprices (meaning the difference in selling price and cost) and CRUDE throughput (total refining volume) to Singapore's refinery income per barrel. RATIO is insignificant in this regression which just means that the profitability has less to do with fluctuations in crude and oil product prices.

However, if one has followed the trend, the increases in oil price for the past few months is mainly to do with limited supply, and not demand. And this limitation in supply is more or less to do with refinery capacity, even before Hurricane Katrina. Many refineries in the world are operating at almost full capacity, Iraq's oil refineries have been slower than expected to operate. This limitation in refinery has been the primary fear to push speculators and hedging companies to predict a prolonged increase in oil prices, even when refinery volume is still capable of supply total demand, but in a very tight way. Hence, at the beginning, oil prices spiralled upwards due to this speculation (as much as US $10 per barrel in recent months is due to speculation in the futures market).

With Hurricane Katrine, 10 oil rigs are out, and the other rigs there are operating at reduced capacity. Oil refineries in the area are all out as well. No guess for the reaction of oil prices. Supply is now more tighter, and with the next new refinery in the world scheduled only to operate in 2007. This means that exisiting refinery are now more hard-pressed to operate, and they can charge a higher fee for processing crudes.

Singapore's refineries are processing crudes for overseas market, so my guess is that the various oil companies' operations here are churning out a more decent profit line than has been the past few years (Singapore oil refinery's profitability has been eroding due to competition and they have been pushing hard to climb up the valued-added chain to have more higher value crackers etc for higher grade oil products, as well as venture towards petrochemical sector).

Actually if you ask me, in the longer term, many countries would probably prefer to have their own refineries than depend on Singapore even though it may not be economical to do so. The recent episodes have demonstrated how vulnerable the supply chain is, and i think many countries are insecure. This has actually been happening for quite a while, despite Singapore possessing very efficient and high-tech refining equipment, other countries have been trying to refine more of their crudes in their smaller inefficient teapot refineries (they call them teapot refineries coz its so small, not because its cute! HAHA). There has been a large pouring of investment in new refineries, and these may prove to draw market share away from Singapore in the next decade.

In any way, as an overall net oil importer, the economy definitely would suffer in an oil price hike, despite an improvement in oil refinery and shipyard. Its just my argument that we are suffering less relatively compared to years ago when we have less service industry and more basic manufacturing.

Just in the Straits Times today (6th Sept'2005), there is a report on the impact of an oil shock PLUS a dampened US economy. I think JPMorgan Chase Bank research team identified Singapore as one of the bigger losers. I quote, "Every sustained US$10 per barrel hike in oil prices could shave as much as 1 percentage point off its GDP growth." This reduction in GDP growth is mostly due to reduced demand from US and other export markets, rather than domestic impact from the oil hike.


Oh btw, one last thing. In case you missed this, if we account for inflation, in terms of real value of oil, the prices of oil has not reach the heights of the oil shocks of 1970's yet. Meaning, this "shock" today is actually not as significant as the 1970's, and the market is actually relatively comfortable with the recent hikes. We can still afford to pay more for oil. (But I'm driving my car less now, heehee)

Hope this helps. Readers, do leave any extra information if you have any to add.
Thank you.

Sexy Wear of the Month

I think they mean it when they say its an uplifting experience.
Go Softwear C-Ring Thong

Excerpt :

This one has to be worn to be fully appreciated - an uplifting experience you won't forget!

Where u put the legs??


I really dun want to know...

Ghost Month

Ghost Month 1
Originally uploaded by Cherub evolon.blogspot.com.

onesingaporeminute. (a little meme started by mrbrown.com, read it here)
photos from cameraphone (Nokia 6260)

yes, I know I'm super late....
very busy in 7th month can!! they visit us only once a year!
tats why i nv blog! must entertain them!

(if u r wondering, no, the magic numbers all never come out for 4D, damnit)

Technorati tag: onesingaporeminute

New Diet Recommendations

UPDATE!: Photo that shows the fattening effect of vegetables is shown below.

Q: I've heard that cardiovascular exercise can prolong life. Is this true?
A: Your heart is only good for so many beats, and that's it. Don't waste them on exercise. Everything wears out eventually. Speeding up your heart will not make you live longer; that's like saying you can extend the life of your car by driving it faster. Want to live longer? Take a nap.

Q: Should I cut down on meat and eat more fruits and vegetables?
A: You must grasp logistical efficiencies. What does a cow eat? Hay and corn. And what are these? Vegetables. So a steak is nothing more than an efficient mechanism of delivering vegetables to your system. Need grain? Eat chicken. Beef is also a good source of field grass, a green leafy vegetable. And a pork chop can give you 100% of your recommended daily allowance of vegetable slop.

Q: Is beer or wine bad for me?
A: Look, it goes to the earlier point about fruits and vegetables. As we all know, scientists divide everything in the world into three categories: animal, mineral, and vegetable. We all know that beer and wine are not animal or mineral, so that only leaves one thing, right? My advice: Have a burger and a beer and enjoy your vegetables.

Q: How can I calculate my body/fat ratio?
A: Well, if you have a body, and you have body fat, your ratio is one to one. If you have two bodies, your ratio is two to one, etc.,

Q: What are some of the advantages of participating in a regular exercise program?
A: Can't think of a single one, sorry. My philosophy is: No Pain...Good.

Q: Aren't fried foods bad for you?
A: You're not listening. Foods are fried these days in vegetable oil. How could getting more vegetables be bad for you?

Q: Will sit-ups help prevent me from getting a little soft around the middle?
A: Definitely not! When you exercise a muscle, it gets bigger. You should only be doing sit-ups if you want a bigger stomach.

Q: Is chocolate bad for me?
A: Are you crazy? HELLO ..... Cocoa beans. another vegetable!!! "It's the best feel-good food around!"

Q: Is swimming good for your figure?
A: If swimming is good for your figure, explain whales to me.

Q: Is getting in-shape important for my lifestyle?
A: Hey! 'Round' is a shape!

Well, I hope this has cleared up any misconceptions you may have had about food and diets. Have a cookie... One more thing... "When life hands you lemons, ask for tequila and salt."
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Compiled this from various sources. Thanks minyi, for the bulk of it.

i guess beer is a "liquid vegetable" then.
nothing to stop me from taking my liquid grains and er, grape juices. :)


This is wat u get from excess vegetables

Questions that are fun to know

Q: Why is there braille on the buttons of drive-thru ATMs?

Note: this is less relevant for Singapore since we don't have drive-thru ATMs here, but they are pretty common in other countries.

ATMs on the streets may have braille to assist the visually handicapped in accessing the ATMs. However, blinds can't drive! (at least i hope they don't attempt to drive...) So this begs the question, why do they have braille on the buttons in these drive-thru ATMs?

This question is actually related to "Why do 7-Elevens have locks on their doors when they are open 24hrs?" as posted here.










A: Although it doesn't make sense to have braille on drive-thru ATMs, one cannot expect the buttons-manufacturers to have a different mold, a different production process to create braille-free buttons for drive thru ATMs. It is simply not economical to have two different production, especially since the large majority of ATMs are on the streets.

And although a 7-Eleven may never lock its doors, most people do lock their doors. its not economical for door manufacturers to produce doors without locks. Perhaps it could be cheaper by a little if 7-Eleven outsource a specialised door manufacturer just to create a lock-free door (hence saving on the costs of the lock) but my guess is that the costs won't be significantly lower enough to justify the absence of a lock for once-in-a-blue-moon-situation like, err, hmm.....
can't really think of any good reason, save for rioting? earthquakes?

oh well.


the same reasoning can be applied to why there are heaters for some cars models, even in tropical areas, and air-cons for cars in all-year-cold regions.

The peanut joke never ends.

Excerpt from the Straight Times, 23 July 2005

"The Moneytree Authority of Singapore (MAS) launched a brand new Singapore Dollar bill, which has been named the "Peanut Series". Each peanut series bill is legal tender equivalent to 600,000 Singapore Dollars, henceforth known as 1 Peanut.

The CEOs across the Republic have been quick to applaud the launch of the 1 Peanut bill. In an interview with a Mr. Durai, a CEO of a philanthropic organisation, who wished to remain anonymous, he said, "Now I don't have to carry suitcases of money home. Prior to the issuing
of the Peanut, I had to carry a whole suitcase of small change home every month. This is because the people who paid me tend to do so in small amounts, like $5 dollars each time, and it can be very irritating. Now I am just paid 1 Peanut with a single bill, slip it quickly into my
wallet and off I go. It's very convenient!"

The reaction by the general public was however cool. Most said that it is unlikely that they will ever use a 1 Peanut bill. With a average national income of S$3000 (0.005 Peanut), the average Singaporean will need about 2 lifetimes to save a Peanut. Said a Mr. Tan, who is a plumber, "The other day, I installed a golden tap in some CEO's bathroom and he paid me using 1 Peanut for the $1000 golden tap. I tell him where got enough change?

Watch out for the newest security features on the 1 Peanut note, including a new watermark which replaces the traditional lion head. The new watermark can only be seen under an intense bright light and close scrutiny because of its extreme lack of transparency.

According to MAS spokesman, the added security features are extremely important given that 1 Peanut can probably buy three 4-room HDB flats, or 10 Nissan Sunnies, the average Singaporean will be very tempted to lay their hands on a Peanut."


1 Peanut worth

When will my escalator move

On the stuck-on-escalator incident here.

Sometimes on our climb up in life, shit happens.
Something in the external environment change and we get stuck.

And instead of climbing on, we grumble and complain.
We stand there, waiting and waiting for the power to resume, when we could have just climb our way up.

Here I am at the escalator, waiting for power to be back again.