My cost of petrol went up, but not because of oil.....

The last time I did an update on crude oil and SGD was Did SGD get weaker? dated 1st November 2023, that was about 2 months ago. 

I estimated at the time that SGD will continue to strengthen against USD with support level of 1.30320 to 3.1723 for SGD=X chart. 

As for crude oil, it has broken its 144-weekly moving average support of 77.78, withy next support level between 53.71 to 63.64, its previous low.

The petrol price has been stabled at SGD2.810 for the last few weeks. The price, however, went up to SGD2.830 when I went for the pump this week.  

This made me think, " has the oil price gone up so drastically last week?"

Why am I sensitive about the oil price?

I noted a potential reversal signal on oil price about 3 weeks ago. However, I was hesitated in logging in my observation considering more information needed. 

Earlier this week is the crossing to a new year with Esso announce shutting of its operation for system adjustment due to its 1% GST increase. 

Esso is not alone in this; many entities reportedly increased their prices siting the 1% GST adjustment. 

Toast Box for instance came up with an essay to explain why they have to increase the price of their kaya toast and local kopi. ignoring the fact that they are already charging premium for something that cost less than SGD2.00.

However, it is not difficult to see that GST is an excuse many use to increase their profit margin.

So is the increase in petrol price the result of crude oil reversal, USD strengthening against SGD or the 1% GST hike?

Fig 1. SGD weekly chart

Since my last entry, SGD hit a low of 1.3144 last week before recovering with a long bar this week. Its recovery is only stopped by its 8-week moving average. However, I suspect it may be in a correction with its 55-week moving average resistance of 1.3497. 

At the same time, I still feel the general direction is still down with USD continues to get weaker. It is presently within the support zone between 1.2998 to 1.3568. It may retreat to its 61.8% projection level before continuing downwards to 1.2998. Next level of support will be 1.2592 if SGD breaks out of this zone.

Its recent correction between January to October 2023 also created a Zig Zag pattern allowing me with another projection estimation with support between 1.2306 to 1,.28626.

I suspect the best position of reversal of SGD at this moment is between 1.2592 to 1.2826, which is the crossing of both projection measurements.

Fig 2. Light Crude Oil weekly chart

There is not many changes with Crude Oil readings. While the bar on 10th December 2023 demonstrated a potential reversal showing a hammer. However, the hammer seems week and the behavior that follows seems weak and struggles to break through its 8-week moving average resistance. 

There is a potential to move higher though., with next level of resistance of 79.35 from 55-week moving average. This considering the crossing of MACD at this point. 

Should its 55-week moving average resistance broken, its previous peak of 95.03 is crucial.

The direction for the moment is still down based on the present set up. Crude oil is still moving within a channel (in green shade). The support levels for this direction are between 28.17 to 53.71.

I believe the price of petrol should be heading higher, but the present increase is not due to crude oil, and it is the power of GST hike.