Production crubs announced by Opec in latter months failed to improve prices as demand from south east Asian countries declined substantially.Standard & Poor's Platt's, part of Standard & Poor's Financial Information Services, provides global pricing and market intelligence report for the various industries like petroleum, petrochemicals, metals and shipping data. These includes breaking news on new projects, developing markets and plantshut downs and changes. It also offers latest shipping fixtures and tanker rates; regular updates of petrochemical tender awards; and the full range of Platt's weekly market reports.Platt's is a reputed name in the petroleum and the petrochemical industry with almost all the reputed companies subscribing to its services. Platt's tracks almost all transaction taking place in the oil market, which has placed it as one of the most reliable data sources in the world.Platt's has recently tied up with The Credit Rating Information Services of India Ltd (Crisil) for strategic alliance for analytical and business development co-operation. Under the alliance, Crisil, through Crisil Research and Information Services (CRIS) will provide marketing support to all the products and services of S&P's Platts in India.

Jorge Montepeque, editorial director of Platt's in an interview with The Financial Express spoke about the repercussions of the oil crisis and the future prospects in the oil sector.Jorge Montepeque is aneconomist by profession and has around 18 years experience in the oil industry as a consultant. His expertise is in crude oil, petroleum and oil products.On the short and long term trend in crude oil prices

I would like to answer this question on a personal level and not as editorial director of Platt's. As far as short term crude oil prices are concerned it is likely to see a minor increase in the coming weeks, starting from November and lasting upto December. This will be on account of seasonal winter season demand. However, if there is a mild winter as was the case last year, this rise will not take place. After this short term rally prices are likely to fall back, however, it is unlikely to drop to last year's level.In the medium term oil prices are likely to be remain stable with moderate fluctuations. However in the long run of say 5-10 years, prices are likely to recover on account of recovery of the Asian economies and is likely to maintain near the $20 per barrel mark.On the petro productpricesConsidering the oncoming winter season, prices of kerosene and diesel are likely to increase in line with the increase in demand. Naphtha prices generally follow the crude oil prices and any increase in crude prices will proportionately be reflected in its prices.On the other hand fuel oil prices are likely to react the least as it has already increased by 40 per cent in the last three months. Fuel oil prices were ruling at $100 per tonne last year, these dropped to $50-55 per tonne at the beginning of the current year and has remained at more or less the same level for most part of the year. Within the last three months prices of fuel oil has increased to $70-80 per tonne.The reason for the increase is fuel oil is mainly because of change in the feedstock by refiners. This was as a result of a drastic cut by Saudi Arabia in fuel oil rich crude oil. Production of Arab medium and Arab heavy was cut, which resulted in a short fall of fuel oil in the market, thus resulting in higher prices for fueloil.Further, as refineries will be increasing their productions in winter, this would further increase the availability of fuel oil in the market, thus further suppressing the price.No major movement is expected in the price movement of motor spirit, while that of crude gasoline is expected to decline.On the impact of the south east Asian crisis on the oil market in the region

There was a three fold impact of the south east Asian crisis. The first was the impact of forex loss as the countries imported crude oil with payment made in dollar, while sales was in domestic currency. This further deteriorated the currency scenario.Secondly a fall out of the currency crisis affected most of the downstream industries which resulted in a negative growth in demand. This resulted in the refineries cutting down on selling price, which affected their refining margins drastically.Singapore refineries which have a capacity of 1.5 million barrels per day and was operating at over 80 per cent utilisation prior to thecrisis had to cut down their production levels to 1.5 million barrel per day. As most of the production of refinery production is meant for exports in the south east asian region, the drop in production reflects the state of affair in the area. Refineries in Korea were also affected with Hanwho, one of the largest refinery in the country operated at 40 per cent utilisation.The impact has been very severe as refineries in the area were set up with an expectation of a 10 per cent growth rate in the coming years.

Korea in fact had doubled its capacity and several new refineries has been announced in Indonesia and Malaysia. Puban Petrochemicals, a major player in Indonesia was planning to set up a large integrated plant, however, the work has been stalled after 15 per cent of erection work had been completed. It is very unlikely that the plant will be commissioned in the near future.On the future of the petrochemical industry in the near future

Demand of petrochemicals had been affected very badlywith China closing its imports since it wanted to curtail its forex outgo. However, it has recently opened up its market. This has affected the prices of commodities. However, the increase is only temperory. Polymer and ethylene prices are unlikely to improve as huge capacities have already been built up to take care of the extra demand from China.