• 4 mintues Texas forced to have rolling brown outs. Not from downed power line , but because the wind energy turbines are frozen.
  • 7 minutes Forecasts for oil stocks.
  • 9 minutes Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 13 minutes European gas market to 2040 according to Platts Analitics
  • 1 hour U.S. Presidential Elections Status - Electoral Votes
  • 3 hours 1 in 5 electric vehicle owners in California switched back to gas because charging their cars is a hassle, new research shows
  • 1 hour *****5 STAR Article by Irina Slav - "The Ugly Truth About Renewable Power"
  • 2 days Americans are not agreement capable.
  • 4 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 11 hours How US Capitalism Uses Nationalism
  • 1 hour Сryptocurrency predictions
  • 2 hours Forecasts for Natural Gas
  • 20 hours Joe Biden's Presidency
  • 3 days Battery storage 30% cheaper than new gas peaker plants, Australian study finds
  • 11 hours The Painful Death of Coal
How COVID-19 Is Transforming The Auto Industry

How COVID-19 Is Transforming The Auto Industry

Dealerships are looking to pre-owned…

Trade War Weighs On Western Automakers In China

Trade War Weighs On Western Automakers In China

Western automakers in China are…

Global Economy Throwing Up Red Flags For Oil

Global Economy Throwing Up Red Flags For Oil

Investors are feeling increasingly gloomy…

Daniel J. Graeber

Daniel J. Graeber

Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,…

More Info

Premium Content

Oil Markets Falling off the Cliff on OECD Concerns

Oil prices declined this week following a report from the Organization for Economic Cooperation and Development that major world economies were expected to make an "uneven recovery" over the coming years. In early November, OPEC said ongoing concerns about the sovereign debt crisis in European economies, coupled with problems with other leading economies, would be a drag on commodity markets. In the United States, meanwhile, partisan rancor over the so-called fiscal cliff means the world economy is nowhere near a post-recession climate.

The OECD, in its latest economic outlook, said it expected to see a "hesitant and uneven" economic recovery develop over the coming years. Growth in the gross domestic product across the 34-member OECD was expected to remain at 1.4 percent for next year before finally passing the 2-percent mark in 2014.

"The world economy is far from being out of the woods," said OECD Secretary-General Angel Gurria in a statement from Paris.

Related Article: Three Dilemmas Awaiting OPEC in the Future

The OECD growth forecast was in line with OPEC's expectations expressed in its monthly market report for November. OPEC, in its forecast, said recovery was "quite weak" in the OECD, noting economic activity there "does not look totally healthy." While hurricane season and the onset of winter is expected to increase oil demand for the fourth quarter, OPEC, in its report, said OECD oil demand for the year was down 0.76 percent compared to last year.

Oil prices dropped below $87 per barrel Wednesday following the OECD's report. While some recovery is expected in Japan, the crisis in the eurozone is expected to pose "a serious threat to the world economy," the report said.  In the United States, meanwhile, the OECD said that even if the Obama administration can broker a budget deal before the New Year and avoid falling of the "fiscal cliff," growth in world's largest economy is expected at 2 percent next year, down from the 2.6 percent predicted in May.

House Speaker John Boehner, R-Ohio, said Wednesday there was no way the U.S. economy could grow by raising taxes for the wealthiest Americans.

"It’ll hurt small businesses," he said. "It’ll hurt our economy."

Related Article: Internal Divisions could Burst Canada's Oil Bubble

But Gurria said if U.S. budget negotiations fail, it could push what he said was "an already weak economy" back into recession.

OPEC, for its part, said U.S. financial issues weren't expected to have a major effect on the country's oil demand. For Europe, however, a "tumbling economy" is reflected in less-than-positive figures for oil consumption.

"Failure to solve the euro area crisis could lead to a major financial shock and global downturn" said the OECD's Gurria. "Governments must act decisively, using all the tools at their disposal to turn confidence around and boost growth and jobs, in the United States, in Europe, and elsewhere."

By. Daniel J. Graeber of Oilprice.com


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News