Persistent oil prices around $100 a barrel will weaken the global economic recovery and hit hardest the auto, airline, gaming and agricultural sectors, Moody's Investors Service said in a report.
The drop in oil prices immediately following Japan’s earthquake and tsunami, reflecting expectations of slower growth in the world's third largest economy, will likely be short-lived as Japan requires more oil imports, Moody’s said.
Moody’s said persistently high oil prices will depress demand for automobiles, travel and discretionary consumer spending and raise costs for feed, fertilizer, equipment and transport in the food protein industry.
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"Ultimately, the effects that high oil and fuel prices have on businesses and consumers depend on a number of factors with some far more exposed than others, especially since the severe oil spike and rapid price collapse seen in 2008,” said Steven Wood, Moody’s managing director.
He added that fuel price hedging, “though not a cure-all, will protect a number of companies, and many have also reduced their exposure to crude-based fuel.”
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