President Donald Trump may have a problem with oil prices being “very high,” but a decline would be a mixed bag for the US economy, thanks to the boom in American energy production.
When prices plunged starting in mid-2014 and stayed low for the next two years, US producers felt the pain, much more and longer than was expected. A pullback in demand for oil-related equipment slowed mining and manufacturing output cooled investment and hurt jobs. For consumers, though, it expanded purchasing power, as less-expensive fill-ups at the petrol vpump left more money to spend elsewhere - supporting the biggest part of the economy.
The idea of cheap oil as a clear positive for the US harks back to an earlier era when it would boost consumption, contain the trade deficit and hold down costs for businesses. Now oil prices play a more nuanced role: there’s been a boom in shale oil production, helping reduce petroleum imports and boost exports. And the global energy-price recovery since mid-2017 has helped usher a rebound in US manufacturing and capital spending, underpinning growth.
If oil prices were to drop again, the effect won’t be “cut and dry the way it would’ve been even a few years ago,” said Stephen Stanley, chief economist at Amherst Pierpont Securities and a former Federal Reserve researcher.
US production has “ramped up dramatically,” so “from a growth perspective, there are both winners and losers,” he said. “It’s one of those things where 90 per cent of the economy benefits small and 10 per cent gets hurt big.”
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Opec responds to Trump tweet, saying it does not set a 'price object'
Opec and its allies to maintain oil curbs despite prices topping $74, analysts say
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Mr Trump tweeted on Friday that “Oil prices are artificially Very High” because of Opec, and the situation “will not be accepted.” The crude glut that’s weighed on prices for three years has almost been wiped out by Opec production cuts, and the group aims to drive fuel inventories even lower.
The closest US allies within Opec rejected Mr Trump’s accusation, including oil ministers from Saudi Arabia, Russia and the UAE. Before the president’s tweet, energy ministers meeting in Saudi Arabia showed a desire to further tighten crude markets. Saudi Arabia is said to desire crude closer to $80; earlier on Friday, it traded near $74 a barrel in London.
Meanwhile, the US is seeking global oil dominance, expanding its own oil production so it relies less on Opec. That’s increased the presence of American energy companies, and their desire for higher prices to facilitate growth, investment, profits and shareholder returns. Mr Trump is seeking to open ocean areas for offshore exploration and allowing drilling in the Arctic National Wildlife Refuge for the first time in four decades.
In recent years, American reliance on foreign petroleum has dropped. The country’s trade deficit for petroleum products was $7.35bn in February, compared with $41.8bn in July 2008, the biggest in data back to 1994.
“Historically, lower oil prices have been a positive for US growth, but the tremendous rise in domestic shale oil production over the past decade has created a powerful counterweight that has offset some of the benefit of lower prices,” Randal Quarles, appointed by Mr Trump last year to the Federal Reserve Board, said in a February speech. “In the immediate aftermath of the decline in oil prices, investment in the energy sector fell off precipitously, pushing down aggregate investment as well.”
The recent pickup in petrol costs isn’t a major risk to household spending, which is benefiting from a strong job market and low borrowing costs. A sustained advance of more than $1 per gallon, which would mark a return to pre-2014 oil-shock levels, could completely offset the aggregate disposable-income gains from the tax cuts, but the increase in fuel prices in the past year “clearly falls well short of this threshold,” Torsten Slok, chief international economist at Deutsche Bank, wrote in a note last week.
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Sheikh Zayed's poem
When it is unveiled at Abu Dhabi Art, the Standing Tall exhibition will appear as an interplay of poetry and art. The 100 scarves are 100 fragments surrounding five, figurative, female sculptures, and both sculptures and scarves are hand-embroidered by a group of refugee women artisans, who used the Palestinian cross-stitch embroidery art of tatreez. Fragments of Sheikh Zayed’s poem Your Love is Ruling My Heart, written in Arabic as a love poem to his nation, are embroidered onto both the sculptures and the scarves. Here is the English translation.
Your love is ruling over my heart
Your love is ruling over my heart, even a mountain can’t bear all of it
Woe for my heart of such a love, if it befell it and made it its home
You came on me like a gleaming sun, you are the cure for my soul of its sickness
Be lenient on me, oh tender one, and have mercy on who because of you is in ruins
You are like the Ajeed Al-reem [leader of the gazelle herd] for my country, the source of all of its knowledge
You waddle even when you stand still, with feet white like the blooming of the dates of the palm
Oh, who wishes to deprive me of sleep, the night has ended and I still have not seen you
You are the cure for my sickness and my support, you dried my throat up let me go and damp it
Help me, oh children of mine, for in his love my life will pass me by.
MOTHER%20OF%20STRANGERS
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The specs
Engine: 3.9-litre twin-turbo V8
Transmission: seven-speed
Power: 620bhp
Torque: 760Nm
Price: Dh898,000
On sale: now
Duminy's Test career in numbers
Tests 46; Runs 2,103; Best 166; Average 32.85; 100s 6; 50s 8; Wickets 42; Best 4-47
MATCH INFO
France 3
Umtiti (8'), Griezmann (29' pen), Dembele (63')
Italy 1
Bonucci (36')
Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Company profile
Date started: December 24, 2018
Founders: Omer Gurel, chief executive and co-founder and Edebali Sener, co-founder and chief technology officer
Based: Dubai Media City
Number of employees: 42 (34 in Dubai and a tech team of eight in Ankara, Turkey)
Sector: ConsumerTech and FinTech
Cashflow: Almost $1 million a year
Funding: Series A funding of $2.5m with Series B plans for May 2020
RESULT
Wolves 1 (Traore 67')
Tottenham 2 (Moura 8', Vertonghen 90 1')
Man of the Match: Adama Traore (Wolves)
FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
The specs: 2018 Audi R8 V10 RWS
Price: base / as tested: From Dh632,225
Engine: 5.2-litre V10
Gearbox: Seven-speed automatic
Power: 540hp @ 8,250rpm
Torque: 540Nm @ 6,500rpm
Fuel economy, combined: 12.4L / 100km
T20 SQUADS
Australia: Aaron Finch (c), Mitchell Marsh, Alex Carey, Ashton Agar, Nathan Coulter-Nile, Chris Lynn, Nathan Lyon, Glenn Maxwell, Ben McDermott, D’Arcy Short, Billy Stanlake, Mitchell Starc, Andrew Tye, Adam Zampa.
Pakistan: Sarfraz Ahmed (c), Fakhar Zaman, Mohammad Hafeez, Sahibzada Farhan, Babar Azam, Shoaib Malik, Asif Ali, Hussain Talat, Shadab Khan, Shaheen Shah Afridi, Usman Khan Shinwari, Hassan Ali, Imad Wasim, Waqas Maqsood, Faheem Ashraf.
UAE currency: the story behind the money in your pockets
Crops that could be introduced to the UAE
1: Quinoa
2. Bathua
3. Amaranth
4. Pearl and finger millet
5. Sorghum
Brief scores:
Juventus 3
Dybala 6', Bonucci 17', Ronaldo 63'
Frosinone 0
MATCH INFO
Everton 2 (Tosun 9', Doucoure 93')
Rotherham United 1 (Olosunde 56')
Man of the Match Olosunde (Rotherham)
