Oil Falls Below US$110

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Crude oil today fell below US$110 a barrel as fears over Hurricane Gustav eases. This is definitely good news as the spike in oil prices to a record high of US$147 a barrel have caused an upward spiral effect to inflation and food prices which have affected countless people worldwide.

Read more below.

Economists in the US continue to predict that the slowdown in oil demand worldwide will continue to depress oil prices.

Now the storm has passed, analysts said slowing oil demand in the United States and other consumer nations would continue to depress oil prices, which have dropped from a record of US$147.27 on July 11.

“It’s the economy, economy, economy. Everyone’s worried about demand destruction,” said Robert Nunan, a risk management executive at Tokyo-based Mitsubishi Corp.

On a local front, what does this mean for us?

From a consumer perspective, hopefully petrol will come down further with the decrease in world oil prices and perhaps inflation. A reduction in prices of goods, especially food, will definitely mean a happier Hari Raya ahead for the Muslims.

From an investor point of view, the quiet KLSE market today with the easing of blue chip shares such as Maybank and Genting might actually make this a good time to pick up good shares at a bargain.

However, with September 16 and Anwar Ibrahim’s promise looming ahead, I would recommend sitting tight and waiting until the local political scene stabilises.

Let’s be patient and see how the scene changes in these coming weeks.