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Briefing

Economic Impact of Oil

Critical Issues

How Vulnerable Is Japan's Economy to High Oil Prices?

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Will An Increase in Hydrocarbon Prices Choke Off Any Recovery?

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Does Asian Countries' Cutting Fuel Prices Signal Shifting to More Market Prices?

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Falling Oil Prices, Depreciating Petrocurrencies

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Background:

The increase in the price of oil and other commodities contributes to an increase in inflation and may exacerbate economic weakness as it reduce demand for both oil products and other goods. Those countries that must import all or the vast majority of their energy sources also face a deterioration of their trade balances as they have to spend more on the imported fuel. Those that subsidize fuel also face fiscal deterioration. These trends were clearly visible in 2008 when an average oil price of US$100 per barrel contributed to the entry into global recession. European countries and Japan are less exposed to oil price spikes than the U.S. and China as their energy use per unit of GDP has been falling and they have higher taxes on petroleum.

 

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Associated Readings

Analysis UniCredit Global Research June 2009 When will the oil price reach the USD 100 mark again? Blogs FT Alphaville Izabella Kaminska Jun 18, 2009 A very bullish oil presentation from Goldman Analysis Nomura Securities Michael Lo and Cheng Khoo Jun 08, 2009 Angels and demons: Near-term oil price to increase, followed by a decline in 2010 Blogs Econbrowser James Hamilton May 31, 2009 Supply, demand, and the price of oil Analysis TD Bank Financial Dina Cover May 28, 2009 Despite Supply Glut, OPEC Leaves Output Quotas As Is Analysis BMO Capital Markets Earl Sweet et al May 25, 2009 Commodities Extend Gains: Though fundamentals still weak Analysis NCB Capital Jarmo T. Kotilaine Apr 22, 2009 Has the oil price turned? Recovery may be partly linked to strategic purchases by China Analysis CIBC World Markets Jeff Rubin et al Jan 23, 2009 StrategEcon: Reflation Analysis New Edge Group Antoine Halff Jan 07, 2009 The Outlook for Physical and Paper Oil Markets in 2009 Analysis Merrill Lynch November 2008 The end to global imbalances Analysis Goldman Sachs David Greely November 2008 Energy Outlook: Credit crunch is near-term bearish, long-term bullish Opinions Economist Intelligence Unit Dec 11, 2008 Analysis Citigroup Nov 13, 2008 Another oil price cut – so what? Analysis BNP Paribas Harry Tchilinguirian Oct 08, 2008 Oil: the Trend and the Cycle