Greg Ip

Articles by The Economist’s U.S. Economics Editor

Archive for the ‘Commodities’ Category

American energy trends: Less of a menace from oil

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Jan 23rd 2012, 22:35 by G.I. | WASHINGTON

 If I had to pick the economy’s likeliest spoiler this year, it would be oil prices. Whether it’s Iran trying to close the strait of Hormuz or the Arab Spring  wafting through Saudi Arabia, I have no idea; but nothing matches the track record of oil in delivering nasty economic surprises.But over the long run, something important is happening to the role of imported oil in the American economy: it’s shrinking. This comes through quite strikingly in the outlookreleased today by America’s  Energy Information Administration. The remarkable expansion of U.S. production from shale gas and unconventional oil sources such as the Bakken formation in North Dakota are relatively well known. There is, however, less awareness that American consumption is barely growing (see the nearby chart). The EIA has sharply revised down how much liquid fuel it reckons America will consume in 2035, to 20m barrels a day, from 22m it projected last year, which would be below the 2005 peak. Couple that with rising domestic production, and America will rely on net imports for just 36% of its liquid fuel needs in 2035, compared to 60% in 2005.

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Written by gregip

January 23, 2012 at 9:30 pm

Posted in Blog posts, Commodities

The global economy: Another year of living dangerously

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Turmoil in the Middle East and disaster in Japan arouse economic angst. Central banks must not make it worse

[Greg Ip] Mar 24th 2011 | from the print edition

THIS was supposed to be a stress-free year for the global economy. By January the financial crisis had faded and Europe’s sovereign-debt crisis seemed less acute. America’s economy was resurgent. Investors piled into equities and sold some of the government bonds they’d bought for troubled times. If there was a worry, it was that emerging economies would grow too quickly, inflating commodity prices.

The year without crisis is not to be. First, Arabian upheaval put oil markets on edge. Then earthquake, tsunami and a nuclear accident clobbered the world’s third-largest economy. How much of a setback to growth do these twin crises represent? And how should economic policymakers react to them?

The entire article is linked here.

Written by gregip

March 24, 2011 at 3:09 pm

Oil markets and Arab unrest: The price of fear

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A complex chain of cause and effect links the Arab world’s turmoil to the health of the world economy

Mar 3rd 2011 | BREGA, LONDON AND WASHINGTON, DC | from the print edition

[Greg Ip and colleagues] TWO factors determine the price of a barrel of oil: the fundamental laws of supply and demand, and naked fear. Both are being tested by the violence that is tearing through Libya, the world’s 13th-largest oil exporter. The price of a barrel of Brent crude now hovers around $115. On February 24th, however, it rose to almost $120, as traders realised that they might have to do for a while without some or all of Libya’s exports: some 1.4m barrels a day (b/d), or about 2% of the world’s needs.

The entire article is linked here.

Written by gregip

March 3, 2011 at 3:40 pm