Oil price surge menacing Asian growth

[dArKeR]

Higher oil prices, if sustained, could sharply cut economic growth in Asia and trigger spikes in inflation and interest rates, the chief economist of the Asian Development Bank (ADB) said yesterday.

Economist Ifzal Ali also warned that even if geopolitical uncertainties pushing prices higher were resolved, growing demand would still keep oil at a floor price of between US$33 to US$36 per barrel.

Among oil-importing economies in the region, China, Hong Kong, India, South Korea, Malaysia, the Philippines, Singapore and Thailand would be the worst hit, the ADB said.

http://www.taipeitimes.com/News/worldbiz/archives/2004/09/30/2003205006

[whistle]

1. $50 per barrel and over will trigger a worldwide recession...

...think of what these prices mean to air and other forms of transportation, electricity costs, the ripple effects of a 75% hike in 12 months will most certainly bring economies to a fast stop until the problem is dealt with and alternative means of off-setting the higher energy costs can be worked into the economies around the world.

[cliss]

3. You could be right.

When the price of oil hit $50/barrel, this was a huge benchmark. Stan Goff said that when the price does go that high, our economy will come to a standstill.

I'm trying to visualize what life will be like when gas hits $2.50/gallon. I think what Stan meant here was that small operators, little mom & pop businesses that rely on transportation in some way will fold.

Our entire society is built upon cheap gas. There's been a lot of "float" over the years. Look at Europe. In Sweden it costs $5.60 per gallon. Why aren't they folding? Because they've been able to work around high prices by conserving.

The US on the other hand, is not able to do this because we simply can't do it. We would need several decades to restructure our society.

In the meantime, thousands of businesses are going to tank because gas is a factor of production, and this will have a catastrophic ripple effect on the economy.

[tedoll78]

2. Here it comes..

fair warning had been issued, but we chose to ignore it. And now we reap the results.