savoy078

I am sure some will say, look into your own backyard when it comes to politics. Well, the average Malaysian is intimately involved and knowledgeable about our local politics. We are swimming against a huge tide but we know where we are and we can possibly see the light at the end of the tunnel (I hope). But why bother about US election? I have always maintained that the US government is so well structured, with sufficient checks and balances that it is very hard for an idiot President to ruin the country... e.g. two terms of George W Bush would testify to that. But somehow, the thought of Trump being POTUS is quite unbearable - its like sending one of the privileged Kims (from North Korea) to head Unicef. But to even consider that he could have enough nominations by the delegates is a major point of contention. How can an average person vote for him? That would indicate that there are sufficient rednecks, racists, with IQs below 90 around ... and thats scary.  Are we suddenly back ...

The Premise - Oil like other commodity has been in a sharp down cycle, as in any commodity cycles, they are bound to turn up. Usually the the U curve of these commodity plays lasts anywhere between 2-5 years. If we look at the basic commodities, they have been on a downcycle since the subprime crisis in 2008 - since there had been easy money and over investment in particular by China. However oil held its own and in fact went to as above USD110 in 2013. Since then it has fallen to USD30 as of early February 2016. Picking Bottoms - It is hazardous to say the least but at USD30 we are probably in the last quartile of correction. The justification being the cost of production. The cost of production below was in 2014, as of today we can impute a higher cost of between 10-20% based on weaker economies of scale and USD strength.  Cost of Production By Country - We can surmise that Saudi Arabia wanted to crush Iran and the latter’s cost of oil extraction is between USD15-16, which woul...