By Mark Huffman
ConsumerAffairs.com
June 25, 2009
The economy still remains mired in recession with unemployment inching toward 10 percent, but other economic indicators in recent days look more promising for consumers.
In its weekly report on energy supplies, the U.S. Energy Information Administration (EIA) predicts crude oil imports may not rise significantly once the recession ends. The reason? The U.S. will soon be producing more oil of its own.
"U.S. crude oil production is expected to increase, mainly due to the start of operations at several major platforms in the deepwater Gulf of Mexico," EIA said in its weekly report of the oil market.
Reduced dependence on foreign oil is a cornerstone of the Obama Administration's energy policy, but the White House is emphasizing renewables rather than traditional energy sources. However, increased U.S. oil production would help reduce the U.S. trade deficit in the short run, while likely putting some downward pressure on world oil prices, with the U.S. buying less from foreign producers.
World oil prices have backed off their highs in the last week, trading just below $70 a barrel. Prices are down on both a stronger U.S. dollar and signs that the global economic recovery may take longer than anticipated.
But that slower recovery has a silver lining for motorists, since it's likely to put pressure on gasoline prices. In fact, prices at the pump appear to have peaked for the moment, and have gone down four straight days, according to AAA's daily Fuel Gauge Report.
Consumers also got good news this week when the Federal Reserve ended its two day meeting with a decision to keep interest rates in their current range of zero to 0.25 percent. Fed policymakers also said they see few signs of inflation in the near term, meaning consumers' costs should remain stable.
At the same time, Fed policymakers said they think the pace of economic contraction is slowing down. They point to an increase in household spending and improving conditions in the financial markets. The latest report on factory orders, for example, shows orders for durable goods rose unexpectedly in May for the second straight month.
