Page 6 - MIN SJA 12 SEPT 2015

BUSINESS A25
Saturday 12 September

US oil production seen tumbling, but low prices may hold

PARIS (AP) — Oil supply barrels to 57.7 million bar- said big production cuts 400,000 barrels a day less in lon in most states, gasoline
from the United States, Rus- rels a day in 2016. But a are needed to balance 2016 than in 2015. demand in the U.S. is at an
sia and other countries out- prominent investment firm the market. Russian and North Sea sup- eight-year high. The agen-
side of OPEC is expected questions whether even Producers in the U.S., who ply is also forecast to shrink cy said demand in China is
to drop sharply next year a cut that steep will shrink need a higher price per in 2016, according to the still growing, despite signs
— possibly the steepest de- the glut of oil on the market barrel than OPEC coun- IEA. Overall, non-OPEC of economic weakness, as
cline since the Soviet Union enough to boost the price. tries to break even, have production should drop the growing use of transporta-
collapsed — because of Amid booming U.S. produc- started to cut back. The most since 1992, when non- tion fuels offsets lower in-
low prices, the Internation- tion and high OPEC output, U.S. Energy Department OPEC output shrank 1 mil- dustrial demand for crude
al Energy Agency forecast the benchmark price of oil estimated this week that lion barrels after the USSR oil. The agency forecast
Friday. plunged from over $100 production fell by 140,000 fell apart. global oil demand would
In its latest monthly report, last year to about $45 this per day in August. The de- Low oil prices are also rise 1.7 million barrels a day
the IEA says non-OPEC week. Global oil demand cline is expected to widen sparking an increase in de- this year, the highest in five
production is expected to has grown, but at a slower in the coming months, and mand, IEA said. With pump years, and grow by anoth-
drop nearly half a million pace, and analysts have production should average prices well below $3 a gal- er 1.4 million next year.q

US producer prices unchanged in August as gas costs fall

Joao Rodrigues, left, removes a pair of newly-formed midsoles for the New Balance proposed crease in July. Excluding counteract.
950v2 sneaker that has passed military testing, from an IMEVA oven as Loyd Johnson looks on the volatile food and ener- Wholesale gas prices fell
at the company’s manufacturing facility in Boston. The Labor Department releases the Producer gy categories, core prices 7.7 percent in August, the
Price Index for August on Friday, Sept. 11, 2015. rose 0.3 percent last month. government said, the big-
In the past year, wholesale gest drop since January.
(AP Photo/Stephan Savoia) prices have actually fallen Home heating oil prices
0.8 percent, the seventh fell 11 percent. The cost of
C. S. RUGABER and other producers were Friday the producer price straight 12-month decline. airline tickets and pickup
AP Economics Writer unchanged in August, the index, which measures Core prices have risen just trucks also fell.
WASHINGTON (AP) — The latest evidence that infla- price changes before they 0.9 percent during that A gallon of gas cost an av-
prices charged by U.S. tion is tame. reach the consumer, was time. erage $2.37 on Thursday,
manufacturers, farmers The Labor Department said flat after a 0.2 percent in- With oil and gas prices fall- 22 cents cheaper than a
ing and most other costs month earlier and down by
little changed, American $1.06 in the past year.
consumers are enjoying But there are also some
mild inflation. The dollar signs of rising costs. In the
has risen about 15 per- past three months core
cent in value in the past prices have increased at
year, which makes imports a 3.4 percent annual rate,
cheaper. compared with a 1.8 per-
Yet tepid price increases cent decline in the preced-
pose a dilemma for the ing three months. Much
Federal Reserve. It wants of that increase has been
to see inflation closer to its driven by rising profit mar-
2 percent target before gins at retailers and whole-
raising interest rates, poten- salers.
tially as soon as its meeting Greg Daco, an economist
next week. at Oxford Economics, said
The Fed targets 2 per- wholesale prices should
cent inflation as a cushion move up later this year as
against falling prices, or oil prices stabilize and the
deflation, which can drag economy continues to
down wages and is hard to grow.q

America’s budget deficit drops to $64.4 billion in August

MARTIN CRUTSINGER reflected quirks in timing stronger economy brings in of this year, government current level of $18.1 trillion,
AP Economics Writer related to the calendar. more tax revenue. $25 million below the cur-
WASHINGTON (AP) — The Some $42 billion in August The 2014 deficit was an im- revenues total $2.88 tril- rent debt limit set by Con-
federal government ran benefit payments were provement from a deficit gress.
up a much smaller bud- made in July because Aug. of $679.5 billion in 2013. For lion, up 8 percent from the Since March, Treasury Sec-
get deficit in August than 1 fell on a Saturday. the four years before 2013, retary Jacob Lew has been
a year ago, remaining on Through the first 11 months the deficit ballooned to same period a year ago. employing emergency
track to record the small- of this budget year ending annual deficits above $1 measures to keep the gov-
est annual deficit in eight Sept. 30, the deficit is run- trillion, reflecting a deep Government spending ernment from going over
years. ning 10 percent below last recession that cut into tax the debt limit.
The Treasury Department year’s level. revenues and expanded over the past 11 months is In a letter to Congress on
said Friday that the deficit The Congressional Bud- government spending on Thursday, Lew estimated
in August totaled $64.4 bil- get Office is forecasting such programs as unem- up 4.8 percent to $3.41 tril- that the emergency mea-
lion, a drop of 50 percent that the deficit for the full ployment benefits and a sures he is now employing
from the same month a year will drop to $426 bil- stimulus package aimed at lion. will last until late October or
year ago. lion, down 11.8 percent jump-starting growth. possibly into early Novem-
Much of that improvement from the previous year as a Through the first 11 months The CBO’s forecast of a ber. q

2015 deficit of $426 billion

would be the lowest im-

balance since the deficit

stood considerably lower

at $160.7 billion in 2007.

The huge deficits over the

past eight years pushed

the national debt up to a