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Sturdy U.S. jobs report boosts chances of Fed rate hike

WASHINGTON U.S. job growth accelerated sharply in May and wages picked up, signs of momentum in the economy that bolster prospects for an interest rate hike in September. Nonfarm payrolls increased 280,000 last month, the largest gain since December, the Labor Department said on Friday. While the unemployment rate rose to 5.5 percent from a near seven-year low of 5.4 percent in April that was because more people, likely new college graduates, entered the labor force, indicating confidence in the jobs market. Payrolls for March and April were revised to show 32,000 more jobs created than previously reported. That together with an eight cent gain in average hourly earnings raises the chances of the Federal Reserve tightening monetary policy this year. "This certainly puts more ammunition in the Fed’s plan to start lift-off in September," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. The dollar […]

Posted On : Published By : Tom Whipple
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BHI: US rig count continues steady but shrinking decline

The US drilling rig count dropped 7 units during the week ended June 5 to settle at 868 rigs working, according to data from Baker Hughes Inc. For the second straight week, the decline represents the second-smallest of the now 26-week slump, during which time the count has lost 1,052 units ( OGJ Online, Dec. 5, 2014 ). Compared with this week a year ago, the count is down 992 units. Last week the count officially fell below the nadir of 876 during the 2008-09 downturn ( OGJ Online, May 29, 2015 ). BHI also reported that the average US rig count for May was 889, down 87 from April and 970 from May 2014. A total of 857 land rigs represented a decline of 86 month-to-month and 944 year-over-year, while a total of 32 offshore rigs represented a decline of 1 unit month-over-month and 26 units year-over-year. Raymond […]

Posted On : Published By : Tom Whipple
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California Farmers Dig Deeper for Water, Sipping Their Neighbors Dry

Photo A farm served by the San Luis Canal Company, which manages the water supply for about 45,000 acres in California. Credit Chad Ress for The New York Times Early one morning in late April, Parvinder Hundal stood beside a hole in the ground at the edge of his almond farm near Tulare in the Central Valley of California. The hole, which was about the size of a volleyball and was encased in a shallow block of concrete, was the opening of a well, one that went hundreds of feet into the earth. He had paid $100,000 to have it drilled, but it wasn’t producing water. Mr. Hundal was hoping that if he cleaned out the well, the water would start flowing again. On the nearby trees, some leaves had turned yellow and the almond husks appeared smaller than usual. In February, Mr. Hundal received emails from various water […]

Posted On : Published By : Tom Whipple
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High Inflation Makes Ukraine’s Troubled Situation Worse

Photo The Petrivka market in Kiev. Across Ukraine, the price of everything seems to have gone up sharply, including tea, apples and fresh fish. Credit Brendan Hoffman for The New York Times KIEV, Ukraine — Olesia Verchenko looked over a selection of blackened avocados at a supermarket here recently. Their price has roughly doubled over the last year, notwithstanding the stickers on them advertising a 25 percent discount. “I don’t think anybody takes avocado anymore, so they are basically rotting on the shelves,” said Ms. Verchenko, an economist. While the rest of Europe tries desperately to shrug off low inflation, Ukraine has added rapidly rising prices to its long list of problems during its civil war with Russian-backed rebels. Official inflation figures showed that prices rose 61 percent in April compared with a year earlier. But many prices have doubled and tripled. Ms. Verchenko, a 37-year-old mother of two […]

Posted On : Published By : Tom Whipple
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U.S. Oil-Rig Count Drops Modestly Again

The drop is a deceleration from last week, when the count fell by 13. The number of U.S. oil drilling rigs—a proxy for activity in the oil industry—has fallen sharply since prices headed south last year. There are now about 60% fewer rigs working since a peak of 1,609 in October. The market rallied earlier this year on expectations that spending cuts would help shrink the global glut of crude, but large supply cuts haven’t materialized so far. U.S. data released on Wednesday showed domestic oil production at a new weekly high, fueling concerns that the global crude market continues to be oversupplied. On Friday, OPEC said it would keep its production ceiling unchanged , the second time in six months it decided to take no action amid the global glut. According to Baker Hughes, gas rigs were down by three to 222 this week. The U.S. offshore rig […]

Posted On : Published By : Tom Whipple
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Floods Threaten Bakken Producers

North Dakota experienced its wettest May on record and all the rain is causing trouble for some oil and gas producers. The region had almost 8 inches of rain last month and now flood waters threaten operators near the confluence of the Missouri and Yellowstone rivers. More rain is expected and could cause raise flood levels to 22 feet by this weekend. North Dakota regulators have stepped up inspections and are urging producers to take precautions. Inclement weather can easily wreak havoc on the energy infrastructure including well flooding, road closures and truck bans. Related: Wet Weather Forcing Delays in Bakken Oilfield Alison Ritter, a spokeswoman for the state Department of Mineral Resources, said 13 companies were notified to secure their equipment. “The well sites might not flood but the access roads might,” Ritter said. “So we want to make sure they have everything secure now in case they […]

Posted On : Published By : Tom Whipple
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Oil exports a strategic move, Murkowski says

Exporting domestic crude oil could be a strategic U.S. asset, lawmakers say. Photo by tcly/Shutterstock WASHINGTON, June 5 (UPI) — U.S. Sen. Lisa Murkowski again pressed for an end to a 1970s ban on crude oil exports, arguing the United States can prove its mettle with its oil reserves. Legislation enacted in response to the 1970s oil embargo by Arab members of the Organization of Petroleum Exporting Countries bans the export of unprocessed crude oil. With U.S. oil production eclipsing 9 million barrels per day, Murkowski argued ending the ban would be a strategic initiative. "This is something that is simply in the best interest of the United States, in terms of both our economic strength and our national security," she said in a statement. "The time to legislate on oil exports is now." Murkowski, R-Alaska, chairwoman of the Senate Energy Committee, introduced a measure in May that seeks […]

Posted On : Published By : Tom Whipple
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Energy job losses mount, but sector recovering

Federal data show the extractive industries suffering in weak crude oil market, though career firm Challenger, Grey & Christmas finds silver lining. UPI/Maryam Rahmanian WASHINGTON, June 5 (UPI) — The number of people seeking unemployment assistance in May in the U.S. extractive industries was up by nearly 5 percentage points year-on-year, federal data show. The Bureau of Labor Statistics reported an unemployment rate of 7.2 percent in May for the mining, quarrying, and oil and gas extraction sectors. That’s up from the 2.6 percent reported in May 2014. Of all non-farm sectors surveyed by the bureau, the extractive industries were the lone standout in terms of job losses year-on-year. "Total non-farm payroll employment increased by 280,000 in May, and the unemployment rate was essentially unchanged at 5.5 percent," Friday’s report read. A report from this week from career transition firm Challenger, Grey & Christmas finds the employment climate in […]

Posted On : Published By : Tom Whipple
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Longevity of bear oil market concerns Texas

Dallas Federal Reserve frets over the potential duration of the down turn in the crude oil market. Photo by ekina/Shutterstock DALLAS, June 5 (UPI) — One of the primary challenges looming for over the health of the Texas state economy is the low price of oil, a report from the Dallas Federal Reserve said. A research report from the bank found one of the major economic concerns for the state was the low price of oil. The price for West Texas Intermediate, the U.S. benchmark, is off more than 40 percent from June 2014 and most analysts expect the depressed cycle to continue. "While the state’s economy has become more diverse and thus less reliant on the oil and gas industry, the price drop has still negatively affected the Texas economy and labor market," the report said. "Some pockets of the state remain heavily dependent on the energy sector, […]

Posted On : Published By : Tom Whipple
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Ukraine Repels Separatists in Fierce Fighting, Poroshenko Says

Photo Ukrainian service members hauled a cart of ammunition on Friday in Maryinka, a town near Donetsk where they have been battling pro-Russia separatists. Credit Evgeniy Maloletka/Associated Press KIEV, Ukraine — In what amounted to a multidimensional confidence-building campaign, President Petro O. Poroshenko of Ukraine tried on Friday to rally international support for his country and to maintain pressure on President Vladimir V. Putin of Russia, including economic sanctions. Mr. Poroshenko held a major news conference, gave interviews to foreign journalists, spoke by phone with President Obama and Chancellor Angela Merkel of Germany, and prepared to welcome two visiting prime ministers to Kiev, Shinzo Abe of Japan and Stephen Harper of Canada. His diplomatic activities precede a summit meeting of leaders of the Group of 7 nations that is scheduled to begin Sunday at Schloss Elmau in the Bavarian Alps, with security issues on the agenda. In each of […]

Posted On : Published By : Tom Whipple