Oil Price Hike and Baht Depreciation Worry Thai Government

[jacko45k]

7 minutes ago, Kinnock said:

But I get it ..... we are part of the 'haves' who are being impacted by currency falls and oil price rises, and it's difficult for us to see the world through the eyes of the 'have-nots"

Probably not bother my Mrs as I do all the tank filling....but not all the poor are farmers, and will be impacted. 

[spidermike007]

16 hours ago, ThailandRyan said:

Today the Thai baht is sitting at $1 USD to 33.86 THB.  I found the attached link to be interesting with its long range forecast which is in sharp contrast to early BOT predictions.

https://longforecast.com/usd-to-bht-today-forecast

Makes sense. Could even be a bit conservative. 40 baht to a dollar is possible. This recovery will likely be worse than 1997.

 

Unemployment right now could be 40%. Tourism will not recover for years. And the economy is being mismanaged by subpar talent. Plus, the lack of leadership here is a huge factor. Very little confidence from any important sectors. 

 

Alot of negatives and few positives on the horizon here. The once roaring tiger of SE Asia is being reduced to a whimpering alley cat, struck down by disease, hunger, and weakness and fear. 

[Enzian]

The baht move compensates me for the trouble it took putting my 800,000 baht equivalent non-O reserve into a Foreign Currency Deposit account, when the baht was between 30 and 31 to the dollar. And the trouble it always caused at Immigration since I didn't have a conventional bank book.

[bert bloggs]

Well when we came back to live permanantly it was 71 baht to the pound,i now work on 40 to the pound ,so anything over now is a bonus ,would loce 50 to the pound.

[John Drake]

2 hours ago, ThailandRyan said:

Sure someone will be along and say they should be using public transport, walk, or ride a bike if they can not afford the fuel, but then how do they get to their jobs which are sometimes to far to walk, and prices for public transport have risen as well.

I have lived here 12 years without owning a car, truck, or even a scooter. I walk, bike, use the BTS when in Bangkok, take taxis, and use buses. I did that when I commuted to work for the first six years; I do it now that I'm retired.  Thailand is one place where owning a car is absolutely unnecessary. If you ever have a food emergency, there is usually a 7 Eleven within 200 meters. Outside in the more remote villages, they have shops there, too. Most people live without cars and trucks. People would be healthier, fitter, and probably happier (no road rage) if they organized themselves to use either mass transit or their own muscles to do a bit of walking.

[Almer]

17 hours ago, Rampant Rabbit said:

funny saw  diesel b7 at 30.5today

Std diesel is steady  at about 28.75

B7. Around 32, what diesel at 30 baht is the General referring to as capped.

[Almer]

1 hour ago, John Drake said:

I have lived here 12 years without owning a car, truck, or even a scooter. I walk, bike, use the BTS when in Bangkok, take taxis, and use buses. I did that when I commuted to work for the first six years; I do it now that I'm retired.  Thailand is one place where owning a car is absolutely unnecessary. If you ever have a food emergency, there is usually a 7 Eleven within 200 meters. Outside in the more remote villages, they have shops there, too. Most people live without cars and trucks. People would be healthier, fitter, and probably happier (no road rage) if they organized themselves to use either mass transit or their own muscles to do a bit of walking.

You can come and stay with me in my village and see how you get on without any form of transport.

[Stargeezr]

Too much worry and stress can cause heart attacks.  If the government worries

too much, well....  Yes world oil prices are rising, so cost of fuel, gas or diesel at the pumps

going up should be no surprise. If the baht value goes down a bit, well that is good news for almost all 

except for the people who are rich enough to save money and depend on that money as well.  That would be the rich, and the elites

would it not?

  Geezer

 

[Almer]

12 hours ago, RichardColeman said:

Tourism ? Could be 60+ baht to the my Uk £ nobody would still be coming in mass with the silly requirements !

If you bet more in one pocket you will pay more from the other, Newtons laws of physics come into play, or was it Edison and the light at the end of the tunnel

[Cake Monster]

4 hours ago, ThailandRyan said:

38+ Thb yesterday at Shell to fill the car with the top 95 brand.  Watching the news this morning Oil prices are heading upwards and with economies struggling this is just another blow to those who have less money from reduced hours or being unemployed.  Sure someone will be along and say they should be using public transport, walk, or ride a bike if they can not afford the fuel, but then how do they get to their jobs which are sometimes to far to walk, and prices for public transport have risen as well.

Oil prices are predicted to rise to about $ 90 per Barrel by the Year end.

The prices at the pumps today will reflect the fact that all the old stock bought in prior to the Gov,t announcement has to be sold before new can be bought in and sold at a lower price.

Already, I am seeing  people that previously used a Pickup Truck to commute to their Factories, using a Motorbike instead.

A rise to $ 90 will hurt when it kicks back in to the real World price after the subsidy ends at the end of the Month

Sad really. To buy a Car, and to look good, and then when the fuel gets a little more expensive having to park the thing up.

[John Drake]

36 minutes ago, Almer said:

You can come and stay with me in my village and see how you get on without any form of transport.

I don't know about your situation, so if you need a car, then I guess you need a car. Does everybody in your village have a car? With other people, I do know that they have never tried or even thought of living without some form of motorized transport. Their default position is if they want to look over their property, go shopping, visit a friend or relative on the next street, then they hop in their car. That an alternative may exist does not occur to them.

[placeholder]

9 hours ago, Gold Star said:

Any slight reductions in fossil fuel consumption that may happen in developed world economies, will be offset by increased use in others. The reality is that emerging economies like India, Africa, and SE Asia demand and will require much more energy, and don't have the money to supplement that addition by using expensive renewable energy options, or the infrastructure needed to run it.  

"expensive renewable energy"

You sure about that?

https://www.lazard.com/perspective/levelized-cost-of-energy-levelized-cost-of-storage-and-levelized-cost-of-hydrogen/

 

And the cost of storage is collapsing.

Collapsing battery costs point to ever-declining forecasts for oil demand

https://www.icis.com/asian-chemical-connections/2021/01/collapsing-battery-costs-point-to-ever-declining-forecasts-for-oil-demand/

battery costs are fast approaching the $100 per kwh build cost that will make it just as cheap to buy an EV as it is to buy an Internal combustion engine vehicle. And fuel and maintenance costs are much lower for an EV.

And for power plants much cheaper options are already available. Form Energy is now building a storage plant for a Minnesota power company with a battery that uses Iron/ IronOxide (rust) to store power for the grid.

https://www.energy-storage.news/iron-air-long-duration-battery-startup-form-energy-closes-us240-million-funding-round/

 

And the rate of EV adoption kees on accelerating ahead of predictions.

https://www.bloomberg.com/news/articles/2021-06-22/shift-to-electric-cars-coming-faster-than-expected-study-shows

[userabcd]

8 hours ago, ExpatOilWorker said:

Although I like it, let's leave a screenshot and come back in a few years and check it out.

 

Literally impossible to predict the exchange rates as presented.

[RobU]

In my daily notification email it says

 

"Oil Price Hike and Bath Depreciation Worry Thai Government

 

I thought it was 'Baht' not 'Bath', Am I wrong?

[Gold Star]

3 hours ago, placeholder said:

"expensive renewable energy"

You sure about that?

https://www.lazard.com/perspective/levelized-cost-of-energy-levelized-cost-of-storage-and-levelized-cost-of-hydrogen/

 

And the cost of storage is collapsing.

Collapsing battery costs point to ever-declining forecasts for oil demand

https://www.icis.com/asian-chemical-connections/2021/01/collapsing-battery-costs-point-to-ever-declining-forecasts-for-oil-demand/

battery costs are fast approaching the $100 per kwh build cost that will make it just as cheap to buy an EV as it is to buy an Internal combustion engine vehicle. And fuel and maintenance costs are much lower for an EV.

And for power plants much cheaper options are already available. Form Energy is now building a storage plant for a Minnesota power company with a battery that uses Iron/ IronOxide (rust) to store power for the grid.

https://www.energy-storage.news/iron-air-long-duration-battery-startup-form-energy-closes-us240-million-funding-round/

 

And the rate of EV adoption kees on accelerating ahead of predictions.

https://www.bloomberg.com/news/articles/2021-06-22/shift-to-electric-cars-coming-faster-than-expected-study-shows

I see thousands of articles like these that are produced supporting renewables, and the imminent demise of fossil fuels, and many demonizing the oil industry. Some may be correct, however the reality that is being missed is that the speed of change in one place is not representative of what is happening NOW on a global scale. It does not consider future energy demand, the places where that will be coming from, and affordability and ease or ability to achieve it using renewables. There are not many Teslas in my village, and I smell many around here now back to cooking with charcoal due to higher gas and electricity prices.

 

In the last years, climate change activist policies have made it difficult or impossible to build a pipeline, or start a new oil project in many developed countries, particularly Canada. They choose instead to source their oil from someone else's backyard that have low environmental, climate, and humanitarian standards. This tends to landlock Alberta oil sands with one main customer, historically at a steep discount, the US. With the third largest oil reserves in the world, there is only one pipeline that will reach tidewater shortly, and world oil prices. ESG investors fleeing the sector have swung the pendulum to the extreme, and we are only now starting to see it swing back extremely hard with a lack of supply, and higher prices.

 

Higher fossil fuel prices are starting to affect the cost and production of all the components required to make green energy.  Commodity price spikes are starting to happen now in copper, aluminum, steel, minerals, fertilizers,  transportation bottlenecks, along with electricity blackouts.  Hydrogen feedstock mainly comes from natural gas. Plastics, mining, petrochemicals, medicine, asphalt, concrete, it just doesn't end. 

 

Faced with a choice, countries will choose not to freeze their populations in the dark rather than adhere to their climate goals. Despite futile attempts to release strategic reserves to control costs, China has made that clear with their recent order to 'obtain energy at all costs'. If they don't, there would likely be a revolution, and likely defeat of the CCP in China.

 

At this early stage, my thesis has been correct. This has made me a LOT of money in the last year alone, securing a very comfortable retirement for me and my family here in Thailand. 

 

There will be a lot of losers and a few winners, as we will all watch this man made energy crises unfold.  There is still time to choose what side you want to be on, regardless of your feelings about climate change. Money doesn't care about your feelings.

 

[In Full Agreement]

13 hours ago, Gold Star said:

17 hours ago, In Full Agreement said:

 

Perhaps where you live, but here in Thailand, I have not seen one yet.

 

Does Bangkok count as being in Thailand?  ????  Last month when I went to MedPark Hospital with friends we parked in the mall next to the hospital and there was a spot near the elevator lobby where there were 13 charging stations for Electric Vehicles.    

 

Do you suspect they were just for show?

 

 

[freedomnow]

Yes, nothing like a strong Baht rate to give tourists great spending power.

 

Sri Lankan Rupee has halved since 2001 to the UK pound.

[In Full Agreement]

13 hours ago, ExpatOilWorker said:

Although I like it, let's leave a screenshot and come back in a few years and check it out.

 

 

The dollar saw an exchange rate of 36thb/USD last around Christmas 2016.    I think it must have stayed at that rate for about 15 seconds.    It began an immediate downfall from that moment on.

 

Prior to that in the early 2000's it was at a rate of 44THB/USD  for a while.

 

I wonder if now is a good time to transfer funds into the  country as a bird in the bush is worth two in the hand as the saying goes.

 

 

[Gold Star]

51 minutes ago, In Full Agreement said:

 

Does Bangkok count as being in Thailand?  ????  Last month when I went to MedPark Hospital with friends we parked in the mall next to the hospital and there was a spot near the elevator lobby where there were 13 charging stations for Electric Vehicles.    

 

Do you suspect they were just for show?

 

 

My point exactly. Let's talk again when you see 13 million charging stations.

[itsari]

Defiantly a worry for the Thai economy . 

There is momentum out there today to try and correct the baht . Be interesting if that can be sustained . Who is behind it would be interesting to know .

[itsari]

7 hours ago, John Drake said:

I have lived here 12 years without owning a car, truck, or even a scooter. I walk, bike, use the BTS when in Bangkok, take taxis, and use buses. I did that when I commuted to work for the first six years; I do it now that I'm retired.  Thailand is one place where owning a car is absolutely unnecessary. If you ever have a food emergency, there is usually a 7 Eleven within 200 meters. Outside in the more remote villages, they have shops there, too. Most people live without cars and trucks. People would be healthier, fitter, and probably happier (no road rage) if they organized themselves to use either mass transit or their own muscles to do a bit of walking.

Your right , but all transport needs energy that at the present moment is going through the roof.

[nkg]

14 hours ago, ToothlessMatt said:

Took a quick look at this link, it would have a tad more credibility of they showed their historic predictions, but then again, maybe they wouldn't!

 

That's a very good point! Using the website archive.org, I've had a look to see what their predictions were in January 2019. They are quite amusing ????

 

Their prediction for October 2021 was 33.703 baht to the pound ????

 

 

 

See for yourself here:

 

https://web.archive.org/web/20190121064321/https://poundf.co.uk/pound-to-baht-forecast-gbp-to-thb

[yimlitnoy]

21 hours ago, In Full Agreement said:

 

I don't know.   It sure looks like Electric Vehicles are roaring onto the market.    

And how do you think the electricity is generated in Thailand for those electric vehicles?

[nkg]

35 minutes ago, ToothlessMatt said:

Thanks for making the effort that I failed to make.

These kinds of predictions are incredibly hard to make on a month by month basis.

What is easier is direction of travel.

Thailand is going to continue to emerge as an aconomy, it wont be straight line growth, and various parties are going to do their damndest to advance their agendas irrespective of how much this slows growth. But the baht will appreciate against the dollar.

On the other hand the (dis)United Kingdom is on a different trajectory, at least for the next 2 or 3 decades.

This combo is going to result in much moaning by fixed income brits. Yes, UK interest rates are likely to go up to control inflation, but they will also go up for borrowers, causing havoc in the housing market. An increase fron 2% to 4% in the mortgage rate doubles the monthly payment.

There is a real risk that interest rates could go up, fuellling inflation, without bolstering the pound, meaning those retirees that don't have indexed linked annuities/pensions, are going to be in for some real pain. Even those that are protected against inflation, like those on police pensions, are likely still in for some pain.

In the longer term (decades) the UK, or its constiuent parts, will either make the structural changes to adapt, or rejoin the EU. In NI's case this would be through re-unification, in Scotland's through independence. In the case of the latter, the battles will be fought in the courts. For the former, the battles are likely to be a lot more more literal.

None of this will be good for sterling or sterling denominated assets.

As oil is dollar denominated, the baht's rise will help with this.

How one squares fossil fuels as a 'stranded asset' with a long-term rise in fossil fuel prices, at least without a meaningful global governance structure with an enforcement arm, I cannot get my head around.

In the short term, with the astronomical rise in sea transport, an increase in demand for oil in Europe because Putin is squeezing supply to get his other pipeline approved, all bets are off - except of course they absolutely aren't if you're a day trader (which I'm not).

Still, it is fun to watch if you havent got too much skin in the game!

 

 

I'm not sure how much further the THB has to climb. Thailand is an export-driven economy, and a strong baht hurts any further export growth.

 

Since the Asian financial crash of 1997 when the baht more than halved against the dollar, the Bank of Thailand (a very competent institution) took firm control of Thailand's currency. They built up huge foreign reserves through exports and tourism, peaking at $246B in Dec 2020, and kept a tight rein on government borrowing.

 

The pandemic has changed the BOTs approach - with no foreign currency coming in from tourism and GDP sharply falling, they have let their foreign reserves drop and they have made multiple statements asking the Thai government to borrow more money (issue government bonds) in order to stimulate Thailand's battered economy.

 

The foreign exchange markets have reacted to government borrowing and falling foreign reserves, and the Thai baht has fallen against other currencies. As things stand, the BOT probably recognise that a weaker baht is beneficial to Thailand in the short to medium term.

 

I'm not too concerned about the state of the major western economies, post-WW2 they have thrived despite various peaks and troughs. They have probably reached the peak of their reliance on cheap imports and overseas fossil fuels. Over the next couple of decades, home-grown fossil fuels, renewables, nuclear, and a gradual increase in domestic manufacturing will reduce their trade deficits and revive their currencies.

 

 

[jacko45k]

15 hours ago, RobU said:

In my daily notification email it says

 

"Oil Price Hike and Bath Depreciation Worry Thai Government

 

I thought it was 'Baht' not 'Bath', Am I wrong?

No, the blunder of the auto spell checker. 

[matchar]

One thing to consider with regards to current oil prices is the OPEC+ cartel production cuts, we are still below pre-pandemic oil demand. Also if a vaccine resistant covid variant emerges we could be back to square one.

 

"Meanwhile, OPEC+ has maintained limits on supply since the outset of the pandemic. At one point, it cut more than 10 million barrels of daily supply from the market due to weak demand. As of July, it agreed to boost output by 400,000 barrels per day (bpd) to phase out the continued 5.8 million bpd in cuts."

https://www.reuters.com/business/energy/white-house-stands-by-calls-opec-do-more-oil-prices-official-2021-10-11/

 

The Thai baht has strengthened significantly since Prayut announced the November reopening but I expect that to be short-lived unless somehow tourists start arriving in droves next month.

[Mavideol]

On 10/11/2021 at 5:59 PM, snoop1130 said:

(FTI) expressed concern about the increasing oil prices and the depreciation of the Thai currency,

nothing to worry about, depeciation already stopped and the  (Bad for us) appreciation  is taking over..... last week 33.8++++  now, today 33.30 to the USD

[Eibot]

And surprise surprise, what happened to the Baht since last Monday. But Thailand Ofcource doesn't influence their valuta

[John Drake]

36 minutes ago, Mavideol said:

nothing to worry about, depeciation already stopped and the  (Bad for us) appreciation  is taking over..... last week 33.8++++  now, today 33.30 to the USD

Got to get it back to 30 or less before any tourists start arriving on 1 November.