Oil Price

Notice that the oil price is now USD70++. Perhaps this is a good news for us consumers. Earlier this week, Malaysia Gov just reduced the petrol/diesel price. That's the 3rd time in 2 and a half months. Just want to emphasize how the rapid decline of oil price affect our petrol price.

What about oil and gas company? Its actually plays a crucial role in O&G projects. In this industry, in order to embark to a drilling campaign we need to do some cost estimate. The estimation would be based on current price of facilities, services and most important thing, Crude Oil Price!

Imagine, earlier this year during crude price of USD120++, suddenly lots of projects emerged. O&G giants rushed for land acquisition throughout the world. Well of course, during that time the price is USD120++. The estimate for the revenues of course are positive. 

What will happened to those projects that estimated to be positive during that time (USD120) now? Most probably they will undergo another re-estimation for cost. There's high possibility the projects now become negative! Which is not economical to proceed. 

No projects, no oil&gas, no revenues, low production, higher demand. Then? Price will be raise again. Hmm..