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U.S. NEWS Friday 2 december 2016
US Financial Front:

Americans should feel muted impact from rising oil price

largest producer after Sau- because heating-oil inven-
di Arabia and Russia, which tories are running above
would help ensure there is their 5-year average and
plenty of oil. grew again last week.
In short, analysts say, con- A small increase in gasoline
sumers and businesses are or even a bigger jump in
not likely to see the return heating oil, which is used in
of $100-a-barrel oil — and only 5 percent of American
the high energy costs that homes, won’t affect shop-
came with it — anytime pers if the economy does
soon. well, in the view of Michael
Still, there could be some Niemira, chief economist at
short-term shocks even be- The Retail Economist LLC,
fore OPEC’s cuts take ef- which does a weekly retail-
fect in January. sales report with Goldman
“The average Joe filling up Sachs.
his tank may notice in the “The consumer isn’t really
next week or two that gas focused on gasoline since
prices move higher by 5 to prices remain low. A bet-
15 cents a gallon just on the ter economy, a better la-
psyche of the deal,” said bor market — those matter
Patrick DeHaan, an analyst much more,” Niemira said.
Leon Balagula changes the price for the gasoline at his Sunoco station in the early morning, in Fort for GasBuddy, a site used But if gasoline spikes to $4,
Lee, N.J. OPEC’s decision on Wednesday, Nov. 30, 2016, to cut production gave an immediate to comparison-shop for “that could be bad. “
boost to oil prices, but the impact on consumers is likely to be more modest and gradual. gasoline. Crude has traded between
(AP Photo/Seth Wenig)
The U.S. Energy Depart- $40 and $50 a barrel the
DAVID KOENIG for U.S. drillers but saved keeps rising, some of the ment predicts that heating last several months. The na-
AP Business Writer money for consumers. slack from OPEC cuts will oil costs will rise about one- tional average for gasoline
DALLAS (AP) — OPEC’s de- Even if OPEC members car- be picked up by produc- third this winter, but that on Thursday stood at $2.16
cision to cut production ry through on their prom- ers in the United States — prediction was issued more a gallon, according to the
gave an immediate boost ises, global oil production good news for drillers and than a month ago and was AAA auto club.
to oil prices, but the impact would only fall by about 1 oilfield workers in Texas and based heavily on forecasts Before the OPEC meeting,
on consumers and the U.S. percent. There is still more North Dakota. President- of much colder tempera- the U.S. Energy Depart-
economy is likely to be supply than demand — the elect Donald Trump has tures in the Northeast. If the ment predicted that crude
more modest and gradual. reason oil prices collapsed vowed to increase drilling weather forecast proves would rise to $50 or $51 a
The cartel agreed Wednes- beginning in mid-2014. in the U.S., the world’s third- wrong, prices could sink barrel next year.q
day to cut output by 1.2 mil- The agreement has
lion barrels a day, reversing sparked a two-day rally
a strategy that produced in oil of about 12 percent
lower oil prices and pain to above $50. If the price

For October:
US construction spending up 0.5%

MARTIN CRUTSINGER jumped 2.8 percent, the
AP Economics Writer biggest increase since last
WASHINGTON (AP) — U.S. December, as federal and
builders boosted spending state and local spending
on construction projects by all rose.
a modest amount in Octo- Financial markets have ral-
ber, helped by big gains lied since the election of
in spending on home con- Donald Trump, reflecting
struction and the biggest in part enthusiasm over his
increase in government vows to increase spending
projects in 10 months. on projects to repair and
Construction spending rose replace the country’s ag-
0.5 percent in October fol- ing infrastructure.
lowing no change in Sep- Despite the advance in
tember, the Commerce government projects,
Department reported spending in the category is
Thursday. still down 0.6 percent from
Home construction in- a year ago. Public projects
creased 1.6 percent, help- have been squeezed for
ing offset a 2.1 percent a number of years as gov-
drop in spending on non- ernments at all levels have
residential projects. Outlays struggled to deal with fall-
for construction of offices, ing revenues following the
hotels and shopping cen- 2007-2009 recession, the
ters all declined. Spending worst downturn in seven
on government projects decades.q