Hear those pockets jingle: U.S. consumer prices recorded their biggest drop in nearly six years in November as gasoline prices tumbled, but that revelation did not change views the Federal Reserve would start raising interest rates in mid-2015. The Labor Department announced this morning that its Consumer Price Index fell 0.3%, the largest decline since December 2008; the index was flat in October. For the 12 months through November, the CPI increased 1.3%, the smallest gain since February. Reuters has the full story.
Supply and demand: As Congress continues to debate the merits of allowing unfettered oil exports for the first time in almost four decades, Bloomberg reports its timing couldn’t be worse. There’s space in the global market for 1 million to 1.5 million barrels a day of U.S. crude if the ban vanishes, Energy Information Administration chief Adam Sieminski told a congressional subcommittee at a Dec. 11 hearing. Bloomberg reports that amount would be less than 2% of worldwide demand, and many in the industry say very little exporting actually would take place at that level. Read the full story.
Sidelined: As many as 550 drilling rigs may need to sit on the sidelines of U.S. shale oil patches over the next few months, analysts say, as oil prices have folded nearly in half since this summer, Fuelfix.com reports. “We think there’s a significant amount of pain coming” to the oil industry and its service companies next year, Praveen Narra, an analyst with Raymond James, says. Any recovery in U.S. drilling activity likely will take longer than in usual oil-price downturns because the decline was set off by a glut in crude supplies, rather than less demand, Narra says. Read the full story.
