News / Asia

Higher Oil Prices Raise Concerns About Inflation in Asia-Pacific Region

A worker counts Indian currency at a fuel station in Mumbai, India, 30 Dec 2010
A worker counts Indian currency at a fuel station in Mumbai, India, 30 Dec 2010

Global oil prices are rising rapidly, pushed by increased global demand and a weaker U.S. dollar.

In Asian markets this week, oil topped $91 a barrel, and there are forecasts it will rise to $100 within weeks. In September oil traded at $75 a barrel.

The rapid climb in prices comes even though several major economies, especially the European Union, still grapple with weak economies.

Jason Feer is an analyst with Argus Media, an oil and energy sector intelligence broker. He says several factors are driving the rise, especially demand for heating oil during the northern winter and recent strikes in France that had closed refineries and cut North Atlantic supplies.

Expectations of strong demand in Asia, where economies are growing steadily, and rising demand in the United States add to the price pressures.

"The economic data there seems to be a general consensus that U.S. economic activity is not as badly affected as it was before and you might see some increased demand there. And certainly Asian countries have really weathered the great recession pretty well. So demand has held up in Asia," Feer said. "I think probably a lot better than most people expected. So it's a classic supply and demand [situation]."

Market analysts say the weak U.S. dollar also boosts prices, since oil is traded in dollars. There are forecasts the dollar could weaken further in 2011 because of the U.S. trade and budget deficits.

The aviation industry is preparing for higher fuel costs.

Albert Tjoeng is the manager of corporate communications in Asia for the International Air Transport Association. He says higher fuel costs will lift the industry's energy bill to $156 billion globally in 2011 from $139 billion this year.

"Looking specifically at oil … for the industry because of the higher fuel costs and lower GDP [gross domestic product] projected for next year we're looking at a lower profit projection of $9.1 billion for 2011 for the industry," he said.

Higher fuel costs, along with rising prices for other commodities, such as grain, are raising concerns of inflation in Asia.

The United Nations Economic and Social Commission for Asia Pacific says higher fuel and food prices particularly will hit the poor in the region - 950 million people - the hardest.

Still, in a recent report, UNESCAP says overall inflation will not be enough to snuff out economic growth in Asia's developing economies, which it forecasts will expand by about 7 percent next year. That forecast is down from estimated growth of 8.3 percent in 2010.

You May Like

China Announces Corruption Probe into Senior Ex-Leader

Former security chief and member of Politburo Standing Committee, Zhou Yongkang, being probed for suspected 'serious disciplinary violation' More

India, US Look to Reset Ties During Kerry Visit

This week's talks will be first high level interaction between two countries since Prime Minister Narendra Modi took charge More

Video Young African Leadership Program Renamed to Honor Mandela

YALI program, launched by President Obama in 2010, aims to build skills in business, entrepreneurship, public management and civic leadership More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Vietnamese Staging Chinese Product Boycott After Oil Rig Spati
X
Reasey Poch
July 28, 2014 7:18 PM
China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video ESA Spacecraft to Land on a Comet

After a long flight through deep space, a European Space Agency probe is finally approaching its target -- a comet millions of kilometers away from earth. Scientists say the mission may lead to some startling discoveries about the origins of the water on earth. VOA’s George Putic has more.
Video

Video Young Africans Arrive in US for Leadership Program

President Barack Obama's Young African Leadership Initiative has brought hundreds of young Africans to the United States for a six-week program aimed at building their knowledge and skills in fields such as public administration and business. Out of the 50,000 young Africans who applied for the program, just one percent was accepted. VOA's Laurel Bowman caught up with some of those who made the cut and has this report.
Video

Video In Honduras, Amnesty Rumors Fuel US Migration Surges

False rumors in Central America are fueling the current surge of undocumented young people being apprehended at the U.S. border. The inaccurate claims suggest the U.S. will give amnesty to young migrants from the region. As VOA's Brian Padden reports from Honduras, these rumors trace back to President Obama's 2012 executive order to halt deportations for some young undocumented immigrants already living in the United States.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.

AppleAndroid