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

How to Safeguard Your Mobile Privacy

As the digital world becomes more mobile, so too do concerns about eroding privacy and increased hacking More

'Desert Dancer' Chronicles Iranian Underground Dance Troupe

Film by Richard Raymond is based on true story of Afshin Ghaffarian and his friends More

Obesity Poses Complex Problem

Professor warns of obesity’s worldwide health impact 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.
Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam Wari
X
Katherine Gypson
May 25, 2015 1:32 AM
For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam War

For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Female American Soldiers: Healing Through Filmmaking

According to the United States Defense Department, there are more than 200-thousand women serving in the U.S. Armed Forces.  Like their male counterparts, females have experiences that can be very traumatic.  VOA's Bernard Shusman tells us about a program that is helping some American women in the military heal through filmmaking.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.
Video

Video On Film: How Dance Defies Iran's Political Oppression

'Desert Dancer' by filmmaker Richard Raymond is based on the true story of a group of young Iranians, who form an underground dance troupe in the Islamic Republic of Iran. This is the latest in a genre of films that focus on dance as a form of freedom of expression against political oppression and social injustice. VOA’s Penelope Poulou has more.
Video

Video Turkey's Ruling Party Trying to Lure Voters in Opposition Stronghold

Turkey’s AK (Justice and Development) Party is seeking a fourth successive general election victory, with the goal of securing two-thirds of the seats in Parliament to rewrite the constitution and change the country's parliamentary system into a presidential one. To achieve that, the party will need to win seats in opposition strongholds like the western city of Izmir. Dorian Jones reports.
Video

Video Millions Flock to Ethiopia Polls

Millions of Ethiopians cast their votes Sunday in the first national election since the 2012 death of longtime leader Meles Zenawi. Mr. Meles' party, the Ethiopian People's Revolutionary Democratic Front, is almost certain of victory again. VOA's Anita Powell reports from Addis Ababa.
Video

Video Scientists Testing Space Propulsion by Light

Can the sun - the heart of our solar system - power a spacecraft to the edge of our solar system? The answer may come from a just-launched small satellite designed to test the efficiency of solar sail propulsion. Once deployed, its large sail will catch the so-called solar wind and slowly reach what scientists hope to be substantial speed. VOA’s George Putic reports.
Video

Video FIFA Trains Somali Referees

As stability returns to the once lawless nation of Somalia, the world football governing body, FIFA, is helping to rebuild the country’s sport sector by training referees as well as its young footballers. Abdulaziz Billow has more from Mogadishu.
Video

Video With US Child Obesity Rates on the Rise, Program Promotes Health Eating

In its fifth year, FoodCorps puts more than 180 young Americans into 500 schools across the United States, where they focus on teaching students about nutrition, engaging them with hands-on activities, and improving their access to healthy foods whether in the cafeteria or the greater community. Aru Pande has more.
Video

Video Virginia Neighborhood Draws People to Nostalgic Main Street

In the U.S., people used to grow up in small towns with a main street lined by family-owned shops and restaurants. Today, however, many main streets are worn down and empty because shoppers have been lured away by shopping malls. But in the Del Ray neighborhood of Alexandria, Virginia, main street is thriving. VOA’s Deborah Block reports it has a nostalgic feel with its small restaurants and unique stores.

VOA Blogs