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Japan quake, Middle East turmoil to impact US energy, trade

March 30/2011

(ICIS) -- The disaster in Japan and rapidly unfolding political upheaval in the Middle East will have significant and perhaps profound influence on US energy supplies and policies, along with near-term trade impact, a top chemicals sector analyst said on Tuesday. Gary Adams, president of Chemical Market Associates Inc (CMAI), told industry executives at the International Petrochemical Conference (IPC) that events in the Middle East and the Japan earthquake and tsunami have raised still more concern among consumers worldwide, and those consumer uncertainties will impact manufacturing.


In the Middle East, Adams noted that the region accounts for 34% of global oil supply, and while the outcome of developing political changes in various countries there cannot be predicted, he said that the implications for long-term oil prices range from negligible to severe.


He noted that world oil prices were already trending up on the global recovery before the first eruption of political change in Tunisia on 17 December last year. While there was little initial impact on oil prices by that uprising, they did jump $10/bbl when turmoil and revolution began in Egypt on 25 January, driven by worries over possible closing of the Suez Canal.


The 15 February outbreak of revolution in Libya has added still more impetus to the price of crude, with the US benchmark West Texas Intermediate (WTI) crude at around $107/bbl as of Tuesday. Depending on how the political processes unfold in the Middle East, Adams said it could result in more access to the regions energy resources - or a shutdown of some oil and gas assets.


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