Tags: Bank | America | Energy | Recession

Bank of America: Energy Sector Keeping US Out of Recession

Friday, 13 July 2012 10:11 AM

Increased energy development in the U.S. is keeping the country out of recession by pushing down fuel and utility prices, saving the country up to $1 billion a day, a Bank of America Merrill Lynch study finds.

Cheaper utility costs alone — the product of new gas and oil finds at home — saved U.S. companies and consumers an average of $566 million a day for the last year, Bank of America Merrill Lynch's chief of commodities research Francisco Blanch finds, USA Today reports.

"Energy is beginning to carry America," Blanch says.

Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.

The United States exports $67.9 million per day of finished petroleum products such as diesel fuel and $32.3 million worth of coal, the newspaper adds.

The country imports 9 million barrels a day of oil, yet domestic oil sources and cheap suppliers like Canada save the country another $56.2 million per day.

Oil prices are off earlier highs, as the global economy appears to be cooling while geopolitical tensions with Iran are waning, at least for now.

“The supply side has been tightening, but the demand side of the equation is still very poor,” says Guy Wolf, a strategist at Marex Spectron Group Ltd., a London-based commodities broker, Bloomberg reports.

“The European liquidity drain is starting to impact heavily on their domestic economy. That is occurring as China slows aggressively and the U.S. recovery has stalled.”

The International Energy Agency, which advises countries with their energy policy, predicts oil prices to fall 7 percent in 2013 a year alone.

For 2013, the global economy should grow 3.8 percent, the International Monetary Fund reports, down from a 4.1-percent estimate made in April.

"Concerns are mounting on the sustainability of the eurozone, there has been a definite easing in China's economic impetus and the U.S. outlook has weakened," the IEA says in its latest monthly report, according to the AFP newswire.

U.S. crude futures are currently trading around $87 a barrel, while European Brent oil prices are currently trading around $102 a barrel.

Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.

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Friday, 13 July 2012 10:11 AM
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