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U.S. Economy Grew at 2.3% Rate in 2nd Quarter

Photo A Ford Motor worker at the company’s Chicago assembly plant. Many automakers reported higher sales in their latest earnings reports. Credit M. Spencer Green/Associated Press In a common pattern of the last few years, the American economy, after a dismal start to 2015, regained its footing in the spring and looked set to continue a modest advance for the rest of the year. But the lackluster data last quarter and a slight downward revision of the estimated growth rate over the last three years underscored the challenges that still lie ahead for an economy that doesn’t seem to be able to move ahead at more than a slow jog. The rebound in April, May and June was largely expected, but the 2.3 percent annualized rate, adjusted for inflation, the Commerce Department reported on Thursday in its initial estimate was a bit below what economists on Wall Street predicted […]

Posted On : Published By : Tom Whipple
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Obama Aide Says Power-Plant Rule Will Be Stronger Than Proposal

The Obama administration’s final plan to cut power-plant emissions will be tougher than was proposed last year, a top White House official said, as a document emerged that showed the government will give states two additional years to comply. White House Chief of Staff Denis McDonough said the final rule to fight climate change will be released soon, and will have new provisions to boost solar, wind and other renewable energy. President Barack Obama would veto any bill aimed at stopping the plan that would cut carbon emissions, he said. “There really is no overstating how big this year is for climate change,” McDonough said Wednesday at a Washington forum on the issue hosted by the New Republic. “We will finalize a stronger rule.” McDonough, who didn’t answer questions, spoke a day after the Environmental Protection Agency posted a slide on its website showing milestones to implement the standard. […]

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Gas Awakening From U.S. Shale Slumber as LNG Shipments Near

After years of languishing in a shale-induced coma, the U.S. natural gas market is waking up. Seasonal price swings will intensify as the country begins shipping liquefied natural gas cargoes to Asia and Europe later this year, said Bank of America Corp., RBC Capital Markets LLC and Wood Mackenzie Ltd. While that’s good news for traders yearning for volatility, it could be bad news for consumers. Exports will help prices rebound from the slump caused by the U.S. pumping record amounts from shale formations. Growing domestic winter demand is already causing spikes and trading volumes in futures markets have rebounded to the highest level in three years. Average retail gas prices also will rise with LNG exports, according to Bloomberg New Energy Finance. “Connecting U.S. natural gas prices into the global market could result in wider spreads at home,” said Francisco Blanch, the head of commodities research at Bank […]

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Senate energy panel votes to lift oil export ban

An oil field is seen at sunrise near Bakersfield, California October 14, 2014. The U.S. Senate Energy Committee on Thursday narrowly passed a bill to lift a 40-year old ban on the export of crude oil, but the measure faces an uphill battle in getting passed by the full Senate. The bill to allow the United States to export oil and boost state revenue-sharing for offshore oil and gas drilling passed along party lines by a vote of 12-10. It was the second significant step in two days for advocates of lifting the ban: Republican House Speaker John Boehner announced his support on Wednesday for repealing the law. But Congressional Democrats remain reluctant to reverse the ban, citing, among other things, a fear it would lead to higher gas prices. Democratic support is seen as crucial to getting President Barack Obama to sign any legislation permitting crude exports. Senate […]

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Oil companies slash spending, jobs as prices slide for second time

A Chevron gas station sign is seen in Del Mar, California, April 25, 2013. Chevron will report earnings on April 26. The stark reality of a much-feared second dip in crude prices is prompting global oil majors and nimble U.S. shale companies alike to ax spending once again a year after the first price crash started. Just days into the second-quarter earnings season, Chevron Corp ( CVX.N ) and Royal Dutch Shell Plc ( RDSa.L ) said they would slash a combined 8,000 thousand jobs around the world. In North Dakota, Whiting Petroleum Corp ( WLL.N ), the top producer in the No. 2 U.S. oil patch, cut its capital expenditure budget days after optimistically raising it 15 percent on bets the renewed downturn in prices would be a temporary blip. ConocoPhillips ( COP.N ), the largest U.S. independent, trimmed its 2015 budget for the third time on Thursday, […]

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U.S. oil storage becomes big business: Kemp

Oil storage tanks are seen at sunrise with the Rocky Mountains and the Denver downtown skyline in the background October 14, 2014. Commercial crude stocks across the United States rose by 105 million barrels early this year to peak at 490 million barrels, the highest level in eight decades. Despite some draw downs in recent weeks, which have reduced inventories to 460 million barrels, stocks are still 92 million barrels higher than this time last year. And stocks could rise again at the end of the third quarter when U.S. refineries enter the traditional autumn turn around season. Yet the cost of storing crude has remained relatively modest throughout thanks to a big increase in tank farm and pipeline capacity added in recent years. Working storage capacity at refineries, tank farms and underground storage facilities in the United States has increased by 85 million barrels, almost 19 percent, since […]

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Oil at $40 Seen Less of a Blow to Russia as Economy Adjusts

Eleven months of surviving with oil below $100 have left Russia hardened enough to endure a monthlong drop to $40 a barrel, a survey of economists showed. Crude at that level will push the economy to a contraction of 5 percent this year and 1 percent in 2016, before it rebounds to 0.8 percent growth in 2017, according to the median of 20 estimates. The central bank said in June the economy will shrink every year through 2017 if oil remains at $40. The ruble’s crisis last year underscored the vulnerability of the world’s biggest energy exporter to slumping oil, which together with gas accounts for about half of budget revenue. The latest forecasts reflect Russia’s move to loosen its reins over the currency and allow consumer demand to absorb the shock of last year’s collapse. “During the first half of 2015, the economy has already adjusted to some […]

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Shell to ax 6,500 jobs, cut spending to cope with lower oil prices

Shell’s company logo is pictured at a gas station in Zurich April 8, 2015. Royal Dutch Shell ( RDSa.L ) is to ax 6,500 jobs this year and step up spending cuts to deal with an extended period of lower oil prices which contributed to a 37 percent drop in the oil and gas group’s second-quarter profits. The Anglo-Dutch company also said it was planning more asset disposals as it pushes ahead with its proposed $70 billion acquisition of BG Group ( BG.L ), bringing total asset sales between 2014 and 2018 to $50 billion. "We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery," Chief Executive Officer Ben van Beurden said. Shell said it anticipated 6,500 staff and direct contractor reductions in 2015 from a total of nearly 100,000 employees. And the group said it would […]

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Why European Motorists Aren’t Benefiting From Oil’s Crash

European motorists eyeing the bear market in crude oil are going to be disappointed at the pump. Brent, the benchmark crude oil, slumped 21 percent since May 6, meeting the common definition of a bear market. For the first time in at least a decade, the milestone has yet to be accompanied by a slide in retail gasoline. In fact, prices rose slightly over the same period, European Commission data show. Energy analysts are pinning the blame on a stronger U.S. economy, saying it’s pulling more cargoes of the fuel than normal across the Atlantic in America’s driving season. European prices normally fall when crude oil has big declines, as this graphic shows. “The lower oil price has created a lot of anger and frustration amongst drivers as they are not seeing those downward moves reciprocated at the pumps,” Luke Bosdet, spokesman for the AA, the U.K.’s biggest motoring […]

Posted On : Published By : Tom Whipple