New record for oil, repercussions in Asia
Hong Kong (AsiaNews/Agencies) - The run-up in oil prices continues, up to 144.57 dollars per barrel in Asia, while the coveted Brent crude costs 145.75 dollars. The price of oil has doubled in one year, especially because of the weakness of the dollar (today at the exchange rate of 1.5891 dollars per euro, the lowest level in two months), the enormous rate of consumption in China and India, and fears over attacks on production facilities in the Middle East and Africa. Further rises are expected, if the European Central Bank today confirms a rise in interest rates and with the growing tension between the United States and Iran, in spite of assurances from Iranian oil minister Golam Hossein Nozari, who says that production will continue even in case of "clashes" with the United States per Israel. In turn, Washington says it is ready, in case of conflict with Tehran, to protect naval traffic in the Strait of Hormuz, where 40% of the world's crude oil passes. Russian president Dmitry Medvedev predicts that the price will soon reach 150 dollars.
Negative reactions have come immediately from Asian financial markets. Today, the Nikkei index in Tokyo fell again (although "only" by 0.2%), marking the longest series of down days in 54 years. In 11 days, it has lost 8.2%, above all - explains Soichiro Monji, a financial expert - because of the rise in the oil price and the drop in auto sales on the U.S. market.
Hong Kong has also lost ground, with the Hang Seng index dropping by 2.3%. In a slight counter-trend move, the Shanghai market has gained about 2%, although analysts attribute this to speculation after losses in recent months and to the possibility of increased public investment by Taiwan in the Chinese stock market.
The airlines face the greatest crisis: Cahay Pacific Airways Ltd., the leading Hong Kong airline, projects losses of 1.6 billion Hong Kong dollars (129 million euros) for 2008, after consistent profits since 1998.
But the consequences of the rise in the oil price are hitting the many poor people of Asia hardest. On July 1, Bangladesh announced price rises for fuel of between 34% and 67%, being unable to keep domestic prices where they were set when oil cost 60 dollars per barrel. Now diesel costs about 47 euro cents per litre, and petrol about 42 cents: high prices for a country where 40% of the 144 million inhabitants live on less than a dollar a day.
Deputy energy minister M. Tamim has issued an appeal to rich countries and oil producers, asking them to "deal with the issue urgently", in the fear that with further price rises, "all development in Bangladesh will stop". In spite of the increase, the government must spend 100 billion takas (about 918.7 million euros) on fuel subsidies, about 40% of the state budget. (PB)