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

US Investors Eye IPO for China's Alibaba

E-commerce giant handled 80 percent of China's online business last year, logging more Internet transactions than US-based Amazon.com and eBay combined More

Video Uneasy Calm Settles Over Israel, Gaza Strip

As cease-fire begins, Palestinians celebrate in streets; Israelis remain wary More

Video Chinese Doctors Use 3-D Spinal Implant

In treatment of a 12-year-old boy Chinese doctors used a 3-D printer and special software to create an exact replica of vertebra 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.
Chinese Doctors Use 3-D Spinal Implanti
X
August 27, 2014 4:53 PM
A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. VOA News reports from Kolkata.
Video

Video Northern California Quake: No Way to Know When Next One Will Hit

A magnitude 6.0 earthquake rocked northern California’s Napa Valley on Sunday. Roads twisted and water mains burst. It was the wine country’s most severe quake in 15 years, and while hospitals treated many people, no one was killed. Arash Arabasadi has more from Washington on what the future may hold for those residents living on a fault line.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.
Video

Video Ukraine: Captured Troops Proof of Russian Role in Separatist Fight

Ukrainian officials say they have captured Russian soldiers on Ukrainian territory -- the latest accusation of Moscow's involvement in the conflict in eastern Ukraine. VOA's Gabe Joselow reports from the Ukrainian side of the battle, where soldiers are convinced of Russia's role.
Video

Video Rubber May Soon Come From Dandelions

Synthetic rubber has been around for more than a century, but quality tires for cars, trucks and aircraft still need up to 40 percent or more natural rubber content. As the source of natural rubber, the rubber tree, is prone to disease and can be affected by bad weather. So scientists are looking for replacements. And as VOA’s George Putic reports, they may have found one in a ubiquitous weed.
Video

Video Jewish Life in Argentina Reflected in Yiddish Tango

Jewish people from across Europe and Russia have been immigrating to Argentina for hundreds of years. They brought with them dance music that were eventually mixed with Argentine tango. The result is Yiddish tango -- a fusion of melodies and cultural experiences that is still evolving today. Elizabeth Lee reports from the Skirball Cultural Center in Los Angeles, where one band is bringing Yiddish tango to an American audience.

AppleAndroid