SINGAPORE (Reuters) – Asia’s emerging markets, the key driver for global oil demand growth, are being hit hard by soaring crude prices and sliding currencies, raising red flags over expectations of further increases in consumption. Import-reliant economies are already aching under oil prices that have risen above $80 per barrel this week, the most since late 2014. Analysts warn the inflationary combination of higher oil costs and weakening currencies, including India’s rupee, Indonesia’s rupiah and the Philippine peso, could cause a global economic slowdown that would also crimp oil demand in those countries. The rumblings of falling demand undermines the current market narrative that projects rising crude prices, in some cases to $100 a barrel, amid the loss of Iranian supply as the United States is set impose new sanctions on the country on Nov. 4. “The currency exchange for those emerging economies is leading to expensive prices at the pump… We expect this will lead to lower demand growth in the region,” said Keisuke Sadamori, director of energy markets and security at the International Energy Agency (IEA) this week. Edward Morse, the global head of commodities at Citi Research, said the emerging market woes could shave 100,000 barrels per… continue reading
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Source: CTRM Center