US buyers consume less oil
Friday, 12 September 2008
Fazle Rashid from New York
The deepening economic crisis in America has prompted the presidential candidates to step-in. The next occupant of the White House, be it Barack Hossain Obama or John McCain, is going to inherit a huge budget deficit.
The federal budget deficit this fiscal year ending September 30 will be a whopping $407 billion. The projection made for the coming fiscal (2009) is far more worse. The deficit would reach a record of $438 billion.
This figure is not inclusive of the bailout figure for two collapsing mortgage banks -- Fannie Mae and Freddie Mac. Meanwhile, Barack Obama who is now trailing John McCain by five percentage point has stepped into the crisis. Obama in a letter written to Treasury Secretary Henry Paulson has suggested a cut in the 'Golden Parachutes' -- Golden Hand shake in Bangladesh-- of the ousted chief executives of the two taken-over banks. Obama pointedly said that any inappropriate windfall payments to the chief executives and senior managers of the failed banks be avoided.
Daniel Mudd, the CEO of Fannie Mae and Richard Syron of Freddie Mac together are eligible for a severance package running into $24 million, the New York Times (NYT) reported Wednesday Under no circumstances should the executives of these institutions earn a windfall when the US treasury has taken unprecedented steps to rescue these companies with tax payers money, NYT quoted Barack Obama as writing.
Obama has been backed by two other Democratic Party senators, Charles Schumer and Jack Reed. The Republican Party presidential nominee John McCain said government rescue of the two failed banks should not turn into a bailout for their top executives.
In a separate development, the Organisation of Petroleum Exporting Countries (OPEC) announced at the end of its meeting in Vienna that it would reduce its oil production by about half a million barrels a day to prevent further slum of the oil price in the global market. The oil price has come down from nearly $150 a barrel to $107 a barrel.
Saudi Arabia opposed any cut in production. The cartels account for about 40 per cent of oil exports. Saudi oil minister Ali Al-Naimi left the meeting which ran upto 'Sehri' time without saying anything. Iran and Venezuela advocated a cut in production while Saudi Arabia, Algeria and Abu Dhabi opposed the move. Khalil, Algeria's oil minister said the cartel was merely responding to oversupply in the market. The OPEC has never taken any decision against the expressed wishes of Saudi Arabia, the largest oil producer in the cartel.
Saudi Arabia is producing 9.5 million barrels a day, 600,000 barrels a day more than its official OPEC quota. The oil price peaked at $145 a barrel in July . It has now come down to $103 a barrel mainly because of slowing global demand.
The oil consumption in America arguably the largest consumer in the world is one million barrel less than the last year. The slowdown of demand in Asia and Europe cannot be ruled out. This OPEC would certainly not wish to see a price collapse.
OPEC's next meeting will be held in December.
The deepening economic crisis in America has prompted the presidential candidates to step-in. The next occupant of the White House, be it Barack Hossain Obama or John McCain, is going to inherit a huge budget deficit.
The federal budget deficit this fiscal year ending September 30 will be a whopping $407 billion. The projection made for the coming fiscal (2009) is far more worse. The deficit would reach a record of $438 billion.
This figure is not inclusive of the bailout figure for two collapsing mortgage banks -- Fannie Mae and Freddie Mac. Meanwhile, Barack Obama who is now trailing John McCain by five percentage point has stepped into the crisis. Obama in a letter written to Treasury Secretary Henry Paulson has suggested a cut in the 'Golden Parachutes' -- Golden Hand shake in Bangladesh-- of the ousted chief executives of the two taken-over banks. Obama pointedly said that any inappropriate windfall payments to the chief executives and senior managers of the failed banks be avoided.
Daniel Mudd, the CEO of Fannie Mae and Richard Syron of Freddie Mac together are eligible for a severance package running into $24 million, the New York Times (NYT) reported Wednesday Under no circumstances should the executives of these institutions earn a windfall when the US treasury has taken unprecedented steps to rescue these companies with tax payers money, NYT quoted Barack Obama as writing.
Obama has been backed by two other Democratic Party senators, Charles Schumer and Jack Reed. The Republican Party presidential nominee John McCain said government rescue of the two failed banks should not turn into a bailout for their top executives.
In a separate development, the Organisation of Petroleum Exporting Countries (OPEC) announced at the end of its meeting in Vienna that it would reduce its oil production by about half a million barrels a day to prevent further slum of the oil price in the global market. The oil price has come down from nearly $150 a barrel to $107 a barrel.
Saudi Arabia opposed any cut in production. The cartels account for about 40 per cent of oil exports. Saudi oil minister Ali Al-Naimi left the meeting which ran upto 'Sehri' time without saying anything. Iran and Venezuela advocated a cut in production while Saudi Arabia, Algeria and Abu Dhabi opposed the move. Khalil, Algeria's oil minister said the cartel was merely responding to oversupply in the market. The OPEC has never taken any decision against the expressed wishes of Saudi Arabia, the largest oil producer in the cartel.
Saudi Arabia is producing 9.5 million barrels a day, 600,000 barrels a day more than its official OPEC quota. The oil price peaked at $145 a barrel in July . It has now come down to $103 a barrel mainly because of slowing global demand.
The oil consumption in America arguably the largest consumer in the world is one million barrel less than the last year. The slowdown of demand in Asia and Europe cannot be ruled out. This OPEC would certainly not wish to see a price collapse.
OPEC's next meeting will be held in December.