Why oil prices will crash again/ Why SIA is a “sell”

In Airlines, Energy on 15/04/2021 at 4:33 am

If OPEC is not careful, oil prices will crash again. A full global revival in oil consumption won’t come until jet fuel demand also recovers.

Meanwhile, American wildcatters are shouting “Drill baby drill”.

Coming back to aviation oil usage

UOBKH downgrades SIA to ‘sell’ as it is ‘less optimistic’ of a traffic recovery by 3Q21
  1. I was a bit hasty in locking in a 12-month fixed-priced elec plan in Mar. Sweet price though — 30% off current regulated tariff.

    Although if oil price stay stable, then I should have saved myself the trouble of switching & simply continued with SP’s wholesale electricity which comes in around 27%-30% off the regulated tariff.

    Shale oil really seems to have price capping power. And most other OPEC and non-OPEC countries can’t & won’t reduce oil supply too much — they’re mostly mid-east & 3rd world countries that really need oil revenues to run their countries & avoid becoming bankrupt.

    SIA & others like it are up shit creek without a large & rich domestic market to support them (unlike say US or China ones). SIA depends on deep pocket biz travel & intercontinental flights to generate most of its profits, which ain’t coming back anytime soon. Right now, it’s mainly just a handful civil servants patronising SIA’s long haul tickets.

    Budget airlines may have a faster recovery, catering to pent-up short haul leisure as regional holiday destinations open up later this year & next. Maybe SIA should sponsor vaccination programs in Thailand, Bali, & Vietnam lol.

    SIA should continue being a 2/3 or 3/4 logistics carrier for the next couple of years, while whipping up its Scoot.

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