Despite 'robust' growth, US economy remains 'below potential': OPEC(Read article summary)
OPEC said it anticipated "robust" growth in the U.S. economy when compared to other developed countries, OilPrice.com reports, though "U.S. expansion remains below potential."
Oil supply growth in the United States is expected to be the highest for non-OPEC countries this year, the Vienna-based cartel said. With less than a month before U.S. voters head to the polls in what's expected to be a close race, both sides of the political debate are making aggressive claims on energy, a contributing factor to the national economy. OPEC said it anticipated "robust" growth in the U.S. economy when compared to other developed countries, though "U.S. expansion remains below potential." The economic climate in the United States, OPEC said, could have regional implications, suggesting the U.S. election could have broad-based effects.
U.S. vice presidential contender Paul Ryan, a congressman from Wisconsin, stuck to his platform's five-point plan for the country during a Thursday debate with Vice President Joe Biden. Both sides of the political debate have focused on energy independence, though candidates differ on the best way forward. Republican challenger Mitt Romney has expressed his support for the Keystone XL oil pipeline, while President Barack Obama touts an "all-of-the-above" policy that includes renewable energy initiatives. The vice presidential candidates, however, barely mentioned the issue.
The United States is gaining substantial ground as an oil producer. The Organization of Petroleum Exporting Countries, in its report for October, found U.S. oil supply is expected to increase by 730,000 barrels per day in 2012, the highest level of growth among non-OPEC members. Increases in crude oil production in Texas and North Dakota were at record levels this year, said OPEC. The U.S. Energy Department, meanwhile, found that production reached 6.6 million bpd in the week ending Oct. 5, the fastest rate in more than 17 years. In a sign the country is not yet on a sure path toward energy independence, however, imports were up 115,000 bpd to 8.2 million bpd for last week. (Related Article: Iran's People Suffer as Oil Income Protects the Government from Hyperinflation)
OPEC said the U.S. economy is expanding at "a relatively robust pace" compared to other major economies. Nevertheless, the cartel said oil-demand growth in the United States has been in negative territory for every month since November, save for May 2012. In terms of the retail sector, OPEC said it blamed high prices for the slump in gasoline demand, though that impact may be a reflection of market strains from an August hurricane, recent problems in the California market and improved fuel economy.
Recent surveys suggest the U.S. presidential contest is tight. Employment prospects and energy independence have been consistent themes in this year's race. With the United States still near the top in terms of developed economies, recent OPEC sentiment suggests there's more at stake than just domestic issues.
"Oil demand in North America is totally dependent upon U.S. economic development and the level of gasoline prices," the cartel's report said. "The outlook for U.S. oil consumption for the rest of the year and for 2013 remains rather pessimistic."