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Brent crude prices increased by 42% between January of October this year and October 2018. There is a strong case to be made that over the next year Brent will give up all of these gains, perhaps even more, as a result of increased supply and weaker demand as the global economy enters recession. Or increased geopolitical tensions between the US and countries such as Iran raise the possibility of oil prices well in excess of $100/bbl. Oil price risk has returned with a vengeance for petrochemicals producers. Detailed scenario planning is required for both of these outcomes.
Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.