Lessons from the past: The last time that U.S. oil drillers got caught up in a price war orchestrated by Saudi Arabia, it ended badly for the Americans. As Bloomberg reports, it was back in 1986 that the Saudis opened the spigot and sparked a four-month, 67% plunge that left oil just above $10 a barrel. The U.S. industry collapsed, triggering almost a quarter-century of production declines, and the Saudis regained their leading role in the world’s oil market. So while no one expects the Saudis to ramp up output now like they did then, and U.S. shale oil companies are pledging to keep drilling regardless, the memory of that bust looms large for American industry executives on the eve of OPEC’s meeting Thursday. Read the full story.
Ring it up: Consumer spending rose modestly in October as gasoline prices fell sharply in a positive sign for the holiday shopping season. Consumption increased 0.2% after being unchanged in September, the Commerce Department reports this morning. Economists surveyed by Action Economics expected a 0.3% rise. Personal income also increased 0.2%. Economists expected a 0.4% jump. The government said earlier this month that retail sales also rebounded in October after declining the previous month. Consumer confidence fell this month but remains near highs recently reached in the economic recovery. Consumer spending makes up more than two-thirds of economic activity.
Smokestack lightning: The Obama administration is expected to release today a contentious and long-delayed environmental regulation to curb emissions of ozone, a smog-causing pollutant linked to asthma, heart disease and premature death. The New York Times reports the sweeping regulation, which would aim at smog from power plants and factories across the country, particularly in the Midwest, would be the latest in a series of Environmental Protection Agency controls on air pollution that wafts from smokestacks and tailpipes. The proposed regulation would lower the current threshold for ozone pollution from 75 parts per billion to a range of 65 to 70 parts per billion, according to people familiar with the plan. Read the full story.
Editor’s note: In observance of the Thanksgiving holiday, Daily Report will not be published on Thursday or Friday. It will return on Monday morning, Dec. 1. Have a safe and happy holiday weekend.
