Capital spending by the U.S. energy sector that has dropped during the coronavirus crisis could fall another 30% or more, which would have far-reaching consequences on the overall economy, the Dallas Federal Reserve Bank said on Tuesday.
U.S. fuel demand dropped at one point by nearly 30% due to shutdowns ordered to stop the spread of the coronavirus, contributing to a dramatic fall in oil prices.
When oil prices have been low in the past, consumers had more discretionary income left for other purchases after paying less at the gas pump. But now, people are restricting their movements nationwide, with the consequence that numerous energy companies have ratcheted down spending and shut wells. “The sharp reduction in capital expenditures by oil companies explains why this oil price decline, on balance, actually hurt U.S. investment spending - and hence, economic growth - not only in oil-producing regions, but overall,” the Dallas Fed article said.“Even for the most-exposed banks, the share of bank loans to the energy sector was no larger than 18% in the fourth quarter of 2019,” the article said.
Deutschland Neuesten Nachrichten, Deutschland Schlagzeilen
Similar News:Sie können auch ähnliche Nachrichten wie diese lesen, die wir aus anderen Nachrichtenquellen gesammelt haben.
LeBron James Once Received a Contract from Jerry Jones to Play for the Dallas CowboysCould the best player in the NBA have been just as good in the NFL?
Weiterlesen »
Jerry Jones Makes Return To Dallas Cowboys Office, 'Big Day For Sports'The Dallas owner is back at the Cowboys office for the 1st time since the pandemic suspended most NFL operations in March.
Weiterlesen »
Full Economic Recovery Unlikely Without Coronavirus Vaccine: Fed Chair PowellIn a rare Sunday interview with '60 Minutes,' Federal Reserve Chairman Jerome Powell laid out his vision for America’s economic recovery—something he said could stretch through 2021—as Covid-19 continues to force business shutdowns by theothersarahh
Weiterlesen »
Full Economic Recovery Unlikely Without Coronavirus Vaccine: Fed Chair PowellThe Dow gained 3.4%, or 800 points, despite Powell’s comments as positive news related to a Moderna vaccine fueled investor optimism.
Weiterlesen »
Trump advisor Kevin Hassett: Fed chief too pessimistic on time it'll take for economy to recoverWhite House senior advisor Kevin Hassett told CNBC on Monday he disagrees with Fed Chairman Jerome Powell on the time-frame for an economic recovery.
Weiterlesen »