Since posting yesterday, oil prices have moved further ahead, with WTI closing at $93.53.
I have also had an interesting dialogue with Paul Satchell of ING Bank, one of the leading chemical analysts, who has kindly allowed me to summarise his comments. Paul believes that investors have become 'dangerously complacent' about the industry's ability to cope with increases in oil prices, following the success of companies such as BASF at passing-through input cost rises since 2004.
He sees a growing danger that commodity chemical producers may suffer the same fate as specialties companies such as Ciba and Clariant, who 'seem to have suffered a major loss of pricing power'.