Oil falls in line with growth uncertainty in major economies

The euro zone is battling ills, China will only forge ahead by about 7 per cent next year and Japan has been hit by the hike in the value-added tax. This means that many major economies in the world are having growth problems, so it is not surprising that the price of oil has dropped along with global demand for it, he said.

The termination of the US’ quantitative easing programme, which has pulled back some global funds, Shale’s increases in energy supplied to the world’s economy and the 10-per-cent strengthening of the US dollar in the past four to five months are other factors for falling oil prices.

The baht depreciated to Bt32.89 per US dollar as of 6pm yesterday from Bt32.76 on November 26. 

Inflation of about 2 per cent is not a cause for concern. Inflation will no longer be on an acceleration trend in the next period from the lowering of energy prices. There is almost no chance for deflation and it would not pose a problem for the economy.

Deflation is more likely to happen in Europe due to its structural problem while inflation is rising in Japan as its central bank has been injecting liquidity into the system, so inflation should begin to ease, he added.

Thailand’s core inflation in November was 1.6 per cent, down by 0.11 percentage point from October.

The domestic diesel price has slid to its lowest level in three years after the Energy Ministry allowed the market mechanism to fully function, a ministry source said yesterday. PTT and Bangchak Petroleum are already going to cut their retail diesel price by 60 satang per litre, effective at 5am today, which will make diesel cost Bt28.79, the lowest level in 35 months or nearly three years.

In the past, whenever the global oil price plunged, the Energy Policy Administration Committee stepped in to ask retailers to make a greater contribution to the Oil Fund as part of its strategy to prevent retailers from gaining too much of a margin. 

The committee also viewed that retailers were already making big contributions at Bt4.30 per litre, the source said. 

According to the Energy Policy and Planning Office, as of yesterday, the marketing margin for petrol was Bt3.57 per litre and for diesel Bt2.31 per litre. The seven-day average diesel margin was Bt1.69 per litre.

Pichit Akrathit, chairman and chief executive officer of Asia Wealth, expects the Stock Exchange of Thailand Index to reach 1,600 points this year and 1,850 points next year from the recovery of the economy.

GDP could expand by 5.1 per cent next year and major trading partners, especially the United States, could rebound. That could boost exports.