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Some analysts worry that higher oil prices will eventually undermine economic growth and demand for Asian goods in the U.S. and Europe. Higher fuel costs also threaten to re-ignite inflation in Asia. "Across the region, food prices tend to rise with a lag in response to oil, and food matters hugely for regional inflation," said Frederic Neumann, economist with HSBC in Hong Kong. "We need crude to come down." Crude has traded near 10-month highs in recent weeks amid growing tensions over Iran nuclear program. Analysts forecast that a pre-emptive military strike by the U.S. or Israel on Iran's nuclear facilities would likely lead to global crude supply disruptions and a jump in oil prices. "A sharp spike would play such havoc with demand in advanced markets ... that even Asian growth would come off its rails," Neumann said. In other energy trading, heating oil fell 0.3 cent to $3.26 per gallon and gasoline futures fell 0.6 cent to $3.33 per gallon. Natural gas slid 5 cents to $2.27 per 1,000 cubic feet.
[Associated
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