Commodity Trading on the International Market-Opec warns oil could reach $200 |02 May 2008

Opec president Chakib Khelil blamed the falling value of the US dollar, which makes other assets, including oil, more attractive for foreign investors.

His comments came early this week as oil prices hit a fresh high, just below $120 a barrel.
Prices were lifted by a strike at a UK refinery that disrupted North Sea production, and supply problems in Nigeria due to pipeline attacks.

BP shut down a key North Sea pipeline at the weekend after staff walked out of the Grangemouth refinery in Scotland in a two-day strike over pensions.

Providing a third of UK oil output, the closure of the Forties pipeline has raised fears about supply shortages.
US light crude hit a high of $119.93 a barrel before edging down to finish at $118.79.

In doing so, it passed the previous record mark of $119.90 a barrel achieved on Friday.
In London, Brent crude ended at $116.74 a barrel after earlier rising to a peak of $117.51 a barrel on Monday.
Regular attacks on oil facilities in Nigeria, the weak US dollar and general concerns about the ability of supply to meet global demand have underpinned the market this year.

Oil producers' body Opec has shown itself disinclined to raise quotas to curb rising prices.
The dollar's decline has also made dollar-denominated assets such as oil and other commodities relatively cheap for some investors.

"We have got a confluence of a number of events that have really disrupted crude oil supply and that's what's driving oil to a new record," said Victor Shum, from energy consultants Purvin and Gertz.

Higher prices and consumption

Normally, when prices of commodities are high, consumption of these commodities falls. People start prioritizing their spending habits, adopting new consumption patterns to suit their pockets.

It would be interesting to know if domestic sales of petrol and diesel at the pumps in Seychelles have actually gone down following the revision of prices.

Increased consumption of expensive fuels from overseas means SEPEC has to find more foreign exchange to pay for imports, depriving other sectors of the money.

Higher prices may also have the positive effect of curbing consumption of the fuels, resulting in savings for both users and the country.

The higher prices are also testing the spending power of the Seychellois during a time when we have to carefully manage our individual and national financial resources.

The landing costs of fuel into Port Victoria keep going up every week and there are warnings of new records in high prices. In seven days the cif values went up by over one rupee (see Fuel Prices below).

On the basis of the cif values for this week, both diesel and petrol (bennzin) could cost around R15 a litre.

Commodity briefs from around the world    

News about rice in the world that could determine prices now and the long term:

• Japan turns down Thailand’s expensive rice

• There is a bumper rice crop forecast for Bangladesh

• Malaysia is to build rice stocks from non-traditional sources

• Brazil adds fuel to the rice price rise with export ban

• Senegal plans five-fold increase in rice production

• Rice grown in the United States is more competitive as Asian prices climb faster

• Australia plans a comeback on the world rice export stage
 

Fuel prices

As at 30th April 2008

Petrol (Bennzin)   R 07.78 a litre cif

Diesel                   R 08.98 a litre cif