Page 25 - ARUBA TODAY

BUSINESS Monday 24 SepteMber 2018
A25

Rising oil prices haven’t hurt the US economy so far

By DAVID KOENIG spending, a cutback in that
Associated Press other 97 percent “causes
DALLAS (AP) — America’s losses for those who sell
rediscovered prowess in oil autos, restaurants, airlines,
production is shaking up resorts and all parts of the
old notions about the im- economy,” Verleger said.
pact of higher crude prices The federal Energy Informa-
on the U.S. economy. tion Administration said this
It has long been conven- month that the U.S. likely re-
tional wisdom that rising oil claimed the title of world’s
prices hurt the economy biggest oil producer earlier
by forcing consumers to this year by surpassing the
spend more on gasoline output of Saudi Arabia in
and heating their homes, February and Russia over
leaving less for other things. the summer. If the agen-
Presumably that kind of cy’s estimates are correct,
run-up would slow the U.S. it would mark the first time
economy. Instead, the since 1973 that the U.S. has
economy grew at its fast- led the oil-pumping pack.
est rate in nearly four years When oil prices tumbled
during the April-through- starting in mid-2014, U.S.
June quarter. energy producers cut back
President Donald Trump In this Sept. 17, 2018, file photo people wait in line as Travis Hall, right, and Brandon Deese, back, on drilling. They cut thou-
appears plainly worried pump fuel from two tanker trucks at a convenience store in Wilmington, N.C. sands of jobs and they
about rising oil prices just a Associated Press spent less on rigs, steel
few weeks before midterm Oil prices are up roughly 40 than 10 million a decade es were expected to boost pipes and railcars to ship
elections that will decide percent in the past year. ago. In the same period, the economy by leaving crude to refineries. That
which party controls the On Friday, benchmark U.S. U.S. production has dou- more money in consumers’ softened the bounce that
House and Senate. crude was trading around bled to more than 10 mil- pocket, yet GDP growth economists expected to
“We protect the coun- $71 a barrel, and the inter- lion barrels a day, accord- slowed at the same time see from cheaper oil.
tries of the Middle East, national standard, Brent, ing to government figures. that lower oil prices took Now, with oil prices rising,
they would not be safe for was closing in on $80. “Because the U.S. now is hold during 2015. energy companies are
very long without us, and The national average price producing so much more Other economists caution boosting production, cre-
yet they continue to push for gasoline stood at $2.85 than it used to, (the rise in against minimizing the dis- ating an economic stimu-
for higher and higher oil per gallon, up 10 percent oil prices) is not as big an ruption caused by energy lus that offsets some of the
prices!” Trump tweeted on from a year ago, accord- impact as it would have prices. “Higher oil prices blow from higher prices on
Thursday. “We will remem- ing to auto club AAA. That been 20 years ago or 10 are unambiguously bad consumers. Oil- and gas-re-
ber. The OPEC monopoly increase likely would be years ago,” said Michael for the U.S. economy,” said lated investment account-
must get prices down greater were it not for a Maher, an energy re- Philip Verleger, an econo- ed for about 40 percent of
now!” Members of the Or- slump in gasoline demand searcher at Rice University mist who has studied en- the growth in business in-
ganization of the Petro- that is typical for this time of and a former Exxon Mobil ergy markets. “They force vestment in the April-June
leum Exporting Countries, year, when summer vaca- economist. consumers to divert their quarter this year. The num-
who account for about tions are over. The weakening link be- income from spending ber of active oil-drilling rigs
one-third of global oil sup- The United States still im- tween oil and the overall on other items to spend- is near a three-year high,
plies, are scheduled to ports about 6 million barrels economy was seen — in ing on fuels.” Since energy although not back to levels
meet this weekend with of oil a day on average, reverse — just three years amounts to only about seen before the 2014 oil-
non-members including but that is down from more ago. Then, plunging oil pric- 3 percent of consumer price crash.q
Russia. The gathering was
not expected to yield any
big decisions — those typi-
cally come at major OPEC
meetings like the one set
for December. Oil mar-
kets, however, were roiled
Friday by a report that at-
tendees were considering
a significant increase in
production to offset declin-
ing output from Iran, where
exports have fallen ahead
of Trump’s reimposition of
sanctions.
OPEC and Russia have
capped production since
January 2017 to bolster
prices. Output fell even
below those targets this
year, and in June the same
countries agreed to boost
the oil supply, although
they didn’t give numbers.