The Federal Reserve says the economy has weakened since the beginning of the year. In its regional economic round-up, it finds that consumers have turned even more cautious in the face of the housing slump and credit crisis. The so-called Beige Book also finds that manufacturers and other businesses were coping with skyrocketing prices for energy and other raw materials. Two-thirds of the Fed's regions "cited softening or weakening in the pace of business activity, while the others referred to subdued, slow or modest growth.'' Fed Chairman Ben Bernanke signaled last week that the central bank stands ready to lower rates again at its next meeting, March 18th.
Oil prices have risen to a new record, topping $104 a barrel in New York. The move came after the government reported a surprise drop in crude oil stockpiles and OPEC held production levels steady. Most analysts had expected the Energy Information Administration to report oil supplies rose last week for the eighth straight time. Instead, they fell by 3.1 million barrels. In Vienna, meanwhile, OPEC said it would hold production levels steady, at least for now. Ministers said slowing economic conditions in the U.S. and falling demand for oil and gasoline shows the world is well-supplied with crude. It is taking verbal aim at the U.S. citing economic "mismanagement'' which it says is having a worldwide effect. Gasoline demand is off about one percent over the last six weeks compared to the same period last year, according to government. At the same time, gasoline supplies rose last week to a 15-year high, according to one analyst.
President Bush says the United States has to change its habits and "get off oil'' to reduce the nation's dependence on foreign suppliers. Bush made his comments in a speech in Washington after OPEC said it would not put more oil on the global market. During a trip to the Middle East in January, Bush had urged OPEC to increase production in order to ease soaring gasoline prices. While calling for energy conservation, Bush joked on Wednesday that it probably did not help that he rode to his speech in a 20-car motorcade.
Houston housing prices declined in the fourth quarter, according to the economic and financial research firm Global Insight, as reported in the Houston Business Journal. Based on prices by the Office of Federal Housing Enterprise Oversight, Houston's median home value declined from $119,800 at the end of the third quarter to $119,300 at year-end. But that still compares favorably to the year-earlier fourth-quarter value of $115,700. Price declines hit 291 of 330 metro areas nationwide covered by the study.
Iraq's cabinet has given the green light to the oil ministry to sign deals with international oil companies to help increase the nation's crude output. The two-year deals are known as technical support agreements, or TSAs. An Iraqi oil ministry official says the TSAs are designed to develop five producing fields to add 500,000 barrels per day to the country's 2.4 million barrels per day output. Last December, Royal Dutch Shell, BP, ExxonMobil and Chevron submitted technical and financial proposals for the five fields and received counterproposals from the Iraqi side. ExxonMobil is based in Irving. In January, representatives from the companies and Iraq met again in Amman, Jordan. They'll hold a third round of discussions later this month. In Vienna, Iraq's oil minister Hussein al-Shahristani tells the Dow Jones Newswires that Iraq intends to compensate these companies with crude oil rather than in cash.
Political newcomer Mark Thompson will face retired petroleum engineer Dale Henry in a Democratic runoff in the Texas Railroad Commission primary. Thompson could not claim a majority in the three-way contest, capturing about 48 percent of the vote with virtually all precincts reporting. Henry had about 27 percent to advance over Art Hall, who had about 24 percent. Thompson is therapist for blind children from Hamilton. The winner of the April 8th runoff advances to the November election to face Republican Michael williams, who chairs the commission.