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

Reports of Mass Murder on Mediterranean Smuggler’s Boat

Boat sailed from Libya with 750 migrants aboard and arrived in Italy with 569 More

Video New Thailand Hotline Targets Misbehaving Monks

Officials say move aims to restore country’s image of Buddhism, tarnished by recent high profile scandals such as opulent lifestyle, drug and alcohol abuse, as well as child sex abuse More

Study: Dust from Sahara Helped Form Bahama Islands

What does the Sahara have in common with a Caribbean island? Quite a lot, researchers say 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.
Astronauts Train in Underwater Labi
X
George Putic
July 25, 2014 7:25 PM
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.
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.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid