Obviously, pump prices in most of Asia will rise. But Pauline Gately, an economist with Deutsche Securities in Hong Kong, is not fretting. Most Asian economies are in a deflationary spiral anyway. Geoffrey Barker of Dresdner Kleinwort Benson agrees, noting that Korea, Taiwan and possibly Singapore can offset some of the oil-price increases by allowing their currencies to strengthen. What is sure is that the world is due for a spell of strong oil prices.
Seasonal factors are also in play.
North America and Europe are topping up reserves now that autumn is here. OPEC is expected to extend current production cuts to March when it meets next week. But importers will need to shell out more dollars. That's not too bad, especially since the won is appreciating against the greenback. The currency gains are trimming what could have been a heftier bill.