29 March 2011 18:55 [Source: ICIS news]
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Gary Adams, president of Chemical Market Associates Inc (CMAI), told industry executives at the International Petrochemical Conference (IPC) that events in the Middle East and the
“In the last several months, there have been several risks to continued economic growth, clouds on the horizon,” he said. “Debt levels are high, excess government stimulation but not sustaining growth,
“On top of all that, we have reverberations from the earthquake and tsunami in
In the Middle East,
He noted that world oil prices were already trending up on the global recovery before the first eruption of political change in
While there was little initial impact on oil prices by that uprising, they did jump $10/bbl when turmoil and revolution began in
The 15 February outbreak of revolution in
Depending on how the political processes unfold in the Middle East,
“At $115/bbl for WTI, the economic expansion would be slowed by a few tenths of a percent,”
At levels above $135/bbl, Adams said, there would be renewed recession in the
Those unsettling developments in the Middle East, along with Japan’s quake-related nuclear power crisis, will increase incentives for more development of US domestic energy resources, he said.
“As a consequence of the
“What does this mean for petrochemicals? We will have to use more fossil fuels for electric power than we might have,” he added.
He said that in the long term, there would be no material effect on
However, he said there would be near-term disruptions to global operations that would impact US petrochemical producers as various shortages work their way back up supply chain. He noted that some automotive production has been halted because of a lack of key components from
“Over the next six months our lean, just-in-time supply system will feel the effect. It will change the way we operate. It won’t be such a lean supply chain,” Adams said, adding: “We haven’t seen the full impact yet.”
In all, he said, “the
And, barring an oil price shock resulting from Middle East developments, he said, “Growth has resumed and should continue” although “consumer headwinds are rising today due to speculation about oil supplies fuelled by
Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
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