WOODLAND HILLS, Calif.--(BUSINESS WIRE)--Analysts with Great American Group (OTCBB: GAMR), a provider of asset disposition, valuation and appraisal services, believe the planned reversal of the Seaway Pipeline in early-to-mid 2012 will have far-reaching implications on the petrochemicals industry.

“As prices climb, domestic petrochemical manufacturers can expect costs to follow suit, which will impact margins and other indicators for companies that are unable to adjust their selling prices accordingly”

In late 2011, Enbridge, Inc. and Enterprise Products Partners LP acquired the pipeline from ConocoPhillips and announced plans to reverse the flow of the pipeline, which will lessen oversupply in the Midwest and allow the oil to reach Houston. Currently, a bottleneck at the Cushing, Oklahoma crude oil hub has resulted in excess supply and low domestic prices as compared to the global benchmark, Brent. U.S. oil prices, which have hovered well below global averages in recent years, are poised to climb closer to the global Brent standard as supply falls back in line with demand.

“As prices climb, domestic petrochemical manufacturers can expect costs to follow suit, which will impact margins and other indicators for companies that are unable to adjust their selling prices accordingly,” says Jonathan Deptula, Great American Group Project Manager and chemicals/plastics industry specialist in Chicago, Illinois. “Producers that are utilizing natural gas as the key feedstock should be able to see increased gross margins, as the spread between oil and natural gas has remained high due to the abundance of U.S. natural gas resulting from shale drilling technology. However, future trends will also strongly depend on whether current petrochemical and plastic demand remains steady or continues to increase.”

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The impact of the announcement was witnessed rapidly, as the Energy Information Administration reported that Cushing, Oklahoma West Texas Intermediate crude prices climbed from lows around $85 per barrel in September and October to nearly $100 per barrel in December.

Great American Group also notes that after a turbulent first half of 2011, market prices for commodity chemicals have remained fairly stable. Stabilization has also been seen for many specialty/fine chemicals after volatility earlier this year. Sales on a dollar basis have increased for many chemicals companies due to improvement in the U.S. manufacturing sector and higher selling prices stemming from rising market prices in early 2011.

For more information about industry trends in chemicals, plastics and packaging, download Great American Group's newest quarterly Chemicals, Plastics and Packaging Monitor – available on the company's website at http://www.greatamerican.com/news_media/downloads/Jan_Monitor_Plastic.pdf.

For more information about asset disposition, valuation and appraisal services available through Great American Group, visit the company's website at www.greatamerican.com.

About Great American Group, LLC (GAMR-G)

Great American Group, LLC, is a provider of asset disposition solutions and valuation and appraisal services to a wide range of industrial and retail clients, as well as lenders, capital providers, private equity investors and professional service firms. Great American Group has offices in Atlanta, Boston, Chicago, Dallas, London, Los Angeles, New York and San Francisco. For more information, contact (818) 884-3737 or visit www.greatamerican.com.

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