By Frank Esposito, Plastics News Staff
Galveston, Texas - Prices for crude oil and natural gas feedstocks are expected to remain high in the short term, but recent moderation in demand could be a sign that a pricing peak is approaching, according to energy analyst Paul Ruwe.
Demand moderation "is one of the first things you look for" when looking for a peak, said Ruwe, a principal with Muse Stancil & Co. consulting firm in Houston.
The recent run-up has been spurred by a number of factors, he explained, including lower production per oil well, lower reinvestment, political instability and the devaluation of the US dollar.
North American plastics and chemicals makers retain their cost advantage because of the region's lower-priced natural gas feedstocks. But even that edge could dissipate as larger supplies of liquefied natural gas become available around the world, Ruwe said at Flexpo 2008, held 25-27 June in Galveston. Mild winter and summer weather have helped North America keep this advantage in recent years.
Plastics News is a sister publication of Urethanes Technology International.