Effects - July 5
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World must brace for oil beyond $150
Alastair Sharp, Reuters
Oil's meteoric rise since the start of the year to nearly $150 has distressed consumers and policy makers the world over, but the stark reality is prices are likely to rise higher still.
For two decades, prices were relatively stable, but then they rose seven-fold from a trough below $20 in 2001. Since breaching the $100 mark on the first trading day of this year they have risen around 45 percent.
Given such momentum, politicians' efforts to bring the price down could well be a waste of energy.
(4 July 2008)
As Gas Prices Soar, Elderly Face Cuts in Aid
John Leland, New York Times
... Faced with soaring gasoline prices, agencies around the country that provide services to the elderly say they are having to cut back on programs like Meals on Wheels, transportation assistance and home care, especially in rural areas that depend on volunteers who provide their own gas. In a recent survey by the National Association of Area Agencies on Aging, more than half said they had already cut back on programs because of gas costs, and 90 percent said they expected to make cuts in the 2009 fiscal year.
(5 July 2008)
High crude costs make industries mull surrender
Cho Jae-eun, JoongAng Daily (Korea)
... Businesses hugely dependent on fossil fuel, including the petrochemical industry, the travel industry and the automobile industry, are taking the toughest blows.
The petrochemical industry is getting beat up badly as it relies on naphtha as raw material. Samsung Petrochemical Co. closed down a PTA (purified terephthalic acid, used to make polyester) factory in Ulsan last month, which had an annual output totaling 200,000 tons.
... “If oil prices hit $150 per barrel, the rate of operation for the plants will fall below 70 percent,” said Kim Pyeong-jung, head of research at Korea Petrochemical Industry Association.
The travel industry is in serious shock as well, with fuel costs almost doubling compared to the same period last year.
Korean Air saw a net loss of 300 billion won ($285.6 million) during the first quarter of this year. ...
Automobile companies are not exempt from the economic hemorrhaging. ...
Small to medium-sized ventures selling plastic products are also sharing the burden as synthetic resin prices have risen almost 50 percent compared to the beginning of the year, according to industry experts.
(5 July 2008)