13 April 2011 14:10 [Source: ICIS news]
By Will Beacham
BRUSSELS (ICIS)--The recent spike in oil prices means there is a chance that parts of the global economy and the petrochemical industry could slip into a double-dip recession, an economist said on Wednesday.
Latest forecasts suggesting moderate growth in global GDP were based on a much lower oil price than we are currently experiencing, according to Alan Eastwood, economic adviser to UK trade group the Chemical Industries Association.
Speaking in a personal capacity on the sidelines of the ICIS purchasing conference in ?xml:namespace>
Most current forecasts were based on an oil price of around $80bbl–$110bbl, said Eastwood. Brent crude is currently above $120/bbl.
“[The oil price] does have the opportunity to influence things and cause a double dip but I have to go with what the experts suggest. We remember what happened in 1979–80 [oil price spike] but I’m not sure we have the same dislocation this time. I think speculation could be playing a bigger part. But I think that in some sectors, not least petrochemicals, there is the chance of a sudden fall.”
Eastwood said some European countries could also experience a double dip, and highlighted countries around the periphery with weak public finances and severe austerity measures.
Asked about chemical market sentiment in
“Producing companies are probably taking a cautious view and are quite happy with high prices. They’ve seen what happens in the past when they’ve rushed to add capacity and seen prices plummet,” he added.
Read Paul Hodges' Chemicals and the Economy blog
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections