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America’s rediscovered prowess in oil production is shaking up old notions about the impact of higher crude prices on the U.S. economy.

It has long been conventional wisdom that rising oil prices hurt the economy by forcing consumers to spend more on gasoline and heating their homes, leaving less for other things.

Presumably that kind of run-up would slow the U.S. economy. Instead, the economy grew at its fastest rate in nearly four years during the April-through-June quarter.

President Donald Trump appears plainly worried about rising oil prices just a few weeks before mid-term elections that will decide which party controls the House and Senate.

“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!” Trump tweeted Thursday. “We will remember. The OPEC monopoly must get prices down now!”

Members of The Organization of the Petroleum Exporting Countries, who account for about one-third of global oil supplies, are scheduled to meet this weekend with non-members including Russia.

The gathering isn’t expected to yield any big decisions — those typically come at major OPEC meetings like the one set for December. Oil markets, however, were roiled Friday by a report that attendees were considering a significant increase in production to offset declining output from Iran, where exports have fallen ahead of Trump’s re-imposition 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.

Rising oil prices

Oil prices are up roughly 40 percent in the past year. On Friday, benchmark U.S. crude was trading around $71 a barrel, and the international standard, Brent, was closing in on $80.

The national average price for gasoline stood at $2.85 per gallon, up 10 percent from a year ago, according to auto club AAA. That increase likely would be greater were it not for a slump in gasoline demand that is typical for this time of year, when summer vacations are over.

The United States still imports about 6 million barrels of oil a day on average, but that is down from more than 10 million a decade ago. In the same period, U.S. production has doubled to more than 10 million barrels a day, according to government figures.

“Because the U.S. now is producing so much more than it used to, [the rise in oil prices] is not as big an impact as it would have been 20 years ago or 10 years ago,” said Michael Maher, an energy researcher at Rice University and a former Exxon Mobil economist.

The weakening link between oil and the overall economy was seen — in reverse — three years ago. Then, plunging oil prices were expected to boost the economy by leaving more money in consumers’ pocket, yet GDP growth slowed at the same time that lower oil prices took hold during 2015.

Other economists caution against minimizing the disruption caused by energy prices.

“Higher oil prices are unambiguously bad for the U.S. economy,” said Philip Verleger, an economist who has studied energy markets. “They force consumers to divert their income from spending on other items to spending on fuels.”

Since energy amounts to only about 3 percent of consumer spending, a cutback in that other 97 percent “causes losses for those who sell autos, restaurants, airlines, resorts and all parts of the economy,” Verleger said.

Pack leader

The federal Energy Information Administration said this month that the U.S. likely reclaimed the title of world’s biggest oil producer earlier this year by surpassing the output of Saudi Arabia in February and Russia over the summer. If the agency’s estimates are correct, it would mark the first time since 1973 that the U.S. has led the oil-pumping pack.

And that has made the impact of oil prices on the economy a more complicated calculation.

When oil prices tumbled starting in mid-2014, U.S. energy producers cut back on drilling. They cut thousands of jobs and they spent less on rigs, steel pipes and railcars to ship crude to refineries. That softened the bounce that economists expected to see from cheaper oil.

Now, with oil prices rising, energy companies are boosting production, creating an economic stimulus that offsets some of the blow from higher prices on consumers. Oil- and gas-related investment accounted for about 40 percent of the growth in business investment in the April-June quarter this year.

Moody’s Analytics estimates that every penny increase at the pump reduces consumer spending by $1 billion over a year, and gasoline has jumped 24 cents in the past year, according to AAA. That is “a clear-cut negative,” but not deeply damaging, said Ryan Sweet, director of real-time economics at Moody’s.

“Usually with gasoline prices, speed kills — a gradual increase [like the current one], consumers can absorb that,” Sweet said. Consumers have other factors in their favor, he added, including a tight job market, wage growth, better household balance sheets, and the recent tax cut.

Sweet said the boon that higher prices represent to the growing energy sector, which can invest in more wells, equipment and hiring, means that the run-up in crude has probably been “a small but net positive” for the economy.

“That could change if we get up to $3.50, $4,” he said.


$1*/ mo hosting! Get going with us!

America’s rediscovered prowess in oil production is shaking up old notions about the impact of higher crude prices on the U.S. economy.

It has long been conventional wisdom that rising oil prices hurt the economy by forcing consumers to spend more on gasoline and heating their homes, leaving less for other things.

Presumably that kind of run-up would slow the U.S. economy. Instead, the economy grew at its fastest rate in nearly four years during the April-through-June quarter.

President Donald Trump appears plainly worried about rising oil prices just a few weeks before mid-term elections that will decide which party controls the House and Senate.

“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!” Trump tweeted Thursday. “We will remember. The OPEC monopoly must get prices down now!”

Members of The Organization of the Petroleum Exporting Countries, who account for about one-third of global oil supplies, are scheduled to meet this weekend with non-members including Russia.

The gathering isn’t expected to yield any big decisions — those typically come at major OPEC meetings like the one set for December. Oil markets, however, were roiled Friday by a report that attendees were considering a significant increase in production to offset declining output from Iran, where exports have fallen ahead of Trump’s re-imposition 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.

Rising oil prices

Oil prices are up roughly 40 percent in the past year. On Friday, benchmark U.S. crude was trading around $71 a barrel, and the international standard, Brent, was closing in on $80.

The national average price for gasoline stood at $2.85 per gallon, up 10 percent from a year ago, according to auto club AAA. That increase likely would be greater were it not for a slump in gasoline demand that is typical for this time of year, when summer vacations are over.

The United States still imports about 6 million barrels of oil a day on average, but that is down from more than 10 million a decade ago. In the same period, U.S. production has doubled to more than 10 million barrels a day, according to government figures.

“Because the U.S. now is producing so much more than it used to, [the rise in oil prices] is not as big an impact as it would have been 20 years ago or 10 years ago,” said Michael Maher, an energy researcher at Rice University and a former Exxon Mobil economist.

The weakening link between oil and the overall economy was seen — in reverse — three years ago. Then, plunging oil prices were expected to boost the economy by leaving more money in consumers’ pocket, yet GDP growth slowed at the same time that lower oil prices took hold during 2015.

Other economists caution against minimizing the disruption caused by energy prices.

“Higher oil prices are unambiguously bad for the U.S. economy,” said Philip Verleger, an economist who has studied energy markets. “They force consumers to divert their income from spending on other items to spending on fuels.”

Since energy amounts to only about 3 percent of consumer spending, a cutback in that other 97 percent “causes losses for those who sell autos, restaurants, airlines, resorts and all parts of the economy,” Verleger said.

Pack leader

The federal Energy Information Administration said this month that the U.S. likely reclaimed the title of world’s biggest oil producer earlier this year by surpassing the output of Saudi Arabia in February and Russia over the summer. If the agency’s estimates are correct, it would mark the first time since 1973 that the U.S. has led the oil-pumping pack.

And that has made the impact of oil prices on the economy a more complicated calculation.

When oil prices tumbled starting in mid-2014, U.S. energy producers cut back on drilling. They cut thousands of jobs and they spent less on rigs, steel pipes and railcars to ship crude to refineries. That softened the bounce that economists expected to see from cheaper oil.

Now, with oil prices rising, energy companies are boosting production, creating an economic stimulus that offsets some of the blow from higher prices on consumers. Oil- and gas-related investment accounted for about 40 percent of the growth in business investment in the April-June quarter this year.

Moody’s Analytics estimates that every penny increase at the pump reduces consumer spending by $1 billion over a year, and gasoline has jumped 24 cents in the past year, according to AAA. That is “a clear-cut negative,” but not deeply damaging, said Ryan Sweet, director of real-time economics at Moody’s.

“Usually with gasoline prices, speed kills — a gradual increase [like the current one], consumers can absorb that,” Sweet said. Consumers have other factors in their favor, he added, including a tight job market, wage growth, better household balance sheets, and the recent tax cut.

Sweet said the boon that higher prices represent to the growing energy sector, which can invest in more wells, equipment and hiring, means that the run-up in crude has probably been “a small but net positive” for the economy.

“That could change if we get up to $3.50, $4,” he said.


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The United States is optimistic about finding a way forward in trade talks with China, but no date has yet been determined for further talks between the two countries, according to a senior White House official. 

The official told reporters Friday at the White House that China “must come to the table in a meaningful way” for there to be progress on the trade dispute. 

The official, speaking on condition of anonymity, said while there is no confirmed meeting between the United States and China, the two countries “remain in touch.”

“The president’s team is all on the same page as to what’s required from China,” according to the official. 

The Trump administration has argued that tariffs on Chinese goods would force China to trade on more favorable terms with the United States.

It has demanded that China better protect American intellectual property, including ending the practice of cybertheft. The Trump administration has also called on China to allow U.S. companies greater access to Chinese markets and to cut its U.S. trade surplus.

Earlier this week, the United States ordered duties on another $200 billion of Chinese goods to go into effect on September 24. China responded by adding $60 billion of U.S. products to its import tariff list.

The United States already has imposed tariffs on $50 billion worth of Chinese goods, and China has retaliated on an equal amount of U.S. goods.

Earlier this month, President Donald Trump threatened even more tariffs on Chinese goods — another $267 billion worth of duties that would cover virtually all the goods China imports to the United States.

“That changes the equation,” he told reporters.

China has threatened to retaliate against any potential new tariffs. However, China’s imports from the United States are $200 billion a year less than American imports from China, so it would run out of room to match U.S. sanctions.


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The United States is optimistic about finding a way forward in trade talks with China, but no date has yet been determined for further talks between the two countries, according to a senior White House official. 

The official told reporters Friday at the White House that China “must come to the table in a meaningful way” for there to be progress on the trade dispute. 

The official, speaking on condition of anonymity, said while there is no confirmed meeting between the United States and China, the two countries “remain in touch.”

“The president’s team is all on the same page as to what’s required from China,” according to the official. 

The Trump administration has argued that tariffs on Chinese goods would force China to trade on more favorable terms with the United States.

It has demanded that China better protect American intellectual property, including ending the practice of cybertheft. The Trump administration has also called on China to allow U.S. companies greater access to Chinese markets and to cut its U.S. trade surplus.

Earlier this week, the United States ordered duties on another $200 billion of Chinese goods to go into effect on September 24. China responded by adding $60 billion of U.S. products to its import tariff list.

The United States already has imposed tariffs on $50 billion worth of Chinese goods, and China has retaliated on an equal amount of U.S. goods.

Earlier this month, President Donald Trump threatened even more tariffs on Chinese goods — another $267 billion worth of duties that would cover virtually all the goods China imports to the United States.

“That changes the equation,” he told reporters.

China has threatened to retaliate against any potential new tariffs. However, China’s imports from the United States are $200 billion a year less than American imports from China, so it would run out of room to match U.S. sanctions.


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У Сумській області загорівся автобус, у якому перебували 20 вихованців Хоружіського центру соціально-психологічної реабілітації дітей у супроводі двох педагогів, повідомила поліція регіону. Ніхто з них не постраждав.

За попередніми даними, під час руху загорівся моторний відсік автобусу, який належав центру. Усі встигли залишити транспорт до того, як вогонь поширився в салон та перекинувся на залишені речі.

Діти та педагоги прямували до одного із санаторних закладів.

Правоохоронці встановлюють причини та обставини інциденту.


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У Сумській області загорівся автобус, у якому перебували 20 вихованців Хоружіського центру соціально-психологічної реабілітації дітей у супроводі двох педагогів, повідомила поліція регіону. Ніхто з них не постраждав.

За попередніми даними, під час руху загорівся моторний відсік автобусу, який належав центру. Усі встигли залишити транспорт до того, як вогонь поширився в салон та перекинувся на залишені речі.

Діти та педагоги прямували до одного із санаторних закладів.

Правоохоронці встановлюють причини та обставини інциденту.


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П’ять підозрюваних у нападі на інкасаторів в Одесі затримані, повідомив перший заступник голови Національної поліції України В’ячеслав Аброськін у Facebook.

«На теперішній час завдяки оперативній поінформованості оперативників Одещини вже по гарячих слідах затримані п’ять підозрюваних, причетних до організації та саме нападу на потерпілих», – розповів Аброськін.

Він зазначив, що інцидент трапився о п’ятій ранку в Одесі. За його словами, невідомі з використанням невстановленої зброї скоїли напад на групу, яка інкасувала платіжний термінал для поповнення мобільних рахунків. Потерпілі отримали поранення, після чого нападники відібрали в них сумку з грошима та зникли.


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П’ять підозрюваних у нападі на інкасаторів в Одесі затримані, повідомив перший заступник голови Національної поліції України В’ячеслав Аброськін у Facebook.

«На теперішній час завдяки оперативній поінформованості оперативників Одещини вже по гарячих слідах затримані п’ять підозрюваних, причетних до організації та саме нападу на потерпілих», – розповів Аброськін.

Він зазначив, що інцидент трапився о п’ятій ранку в Одесі. За його словами, невідомі з використанням невстановленої зброї скоїли напад на групу, яка інкасувала платіжний термінал для поповнення мобільних рахунків. Потерпілі отримали поранення, після чого нападники відібрали в них сумку з грошима та зникли.


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Українці Закарпаття, які отримують угорські паспорти, використовують їх для вільного працевлаштування в Європейському союзі, а не поповнюють таким чином угорську спільноту, розповів радник міністра закордонних справ України Тарас Качка в ефірі «Громадського телебачення».

Він зазначив, що громадяни України з другим угорським паспортом не використовують їх для того, щоб жити в Угорщині, а працевлаштовуються в тих країнах ЄС, де для українців ринок праці важкодоступний.

Читайте також: Угорський паспорт як загроза. Реакція України

Цього тижня засоби інформації оприлюднили відео, на якому українцям роздають паспорти Угорщини у консульстві Угорщини в Береговому з проханням не повідомляти про це владі. Голова МЗС України Павло Клімкін зазначив, що відомство перевіряє автентичність відео і назвав можливим видворення угорського консула у Берегові.

У відповідь міністр закордонних справ Угорщини Петер Сійярто попередив, що його країна витлумачила б можливу висилку угорського консула з Берегова як недружній і ризикований крок, який перемістив би стан двосторонніх відносин у «новий вимір» і не залишився би без відповіді Будапешта.


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Українці Закарпаття, які отримують угорські паспорти, використовують їх для вільного працевлаштування в Європейському союзі, а не поповнюють таким чином угорську спільноту, розповів радник міністра закордонних справ України Тарас Качка в ефірі «Громадського телебачення».

Він зазначив, що громадяни України з другим угорським паспортом не використовують їх для того, щоб жити в Угорщині, а працевлаштовуються в тих країнах ЄС, де для українців ринок праці важкодоступний.

Читайте також: Угорський паспорт як загроза. Реакція України

Цього тижня засоби інформації оприлюднили відео, на якому українцям роздають паспорти Угорщини у консульстві Угорщини в Береговому з проханням не повідомляти про це владі. Голова МЗС України Павло Клімкін зазначив, що відомство перевіряє автентичність відео і назвав можливим видворення угорського консула у Берегові.

У відповідь міністр закордонних справ Угорщини Петер Сійярто попередив, що його країна витлумачила б можливу висилку угорського консула з Берегова як недружній і ризикований крок, який перемістив би стан двосторонніх відносин у «новий вимір» і не залишився би без відповіді Будапешта.


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