Got Those OPEC Blues Again And Rational Exuberance :: essays research papers fc

Got those OPEC Blues Again and Rational Exuberance succinctSince March of 1999, when the price of West Texas Intermediate underbred cover was at $13 a barrel, we have seen a steady change magnitude in prices in all phases of the parsimony. OPEC, the organization that is largely responsible for setting proceeds goals in the Middle East, was under fire to find ways to increase prices. OPEC members at this time pledged to cut back the return of crude and push oil prices higher. (Business Week, 48) The results were better than most expected crude oil prices were almost $27 a barrel on November 23, 1999, the highest price since the 1991 disjuncture War. (Business Week, 48) The demand for oil is outpacing current supply by 2.8 million barrels, cause some in Congress to push for relief by tapping into the strategic Petroleum restrains. (Business Week, 49) The rapid increases in prices have had a welcome way out on Big Oil, however. Companies such as BP Amoco, Chevron and august/ Dutch Shell Group have posted 15% increases in earnings (Business Week, 49) This trend is expected to continue, with L Bruce Lanni, an analyst at CIBC ara Markets Inc. noting, I see clear sailing ahead for the next devil to three years. (Business Week, 49)Happy days are here again This quote, renowned by Jodie Allen of U.S. News and World Report, refers to the booming U.S. economy. (Allen, 71) The stock market, as of November 8, 1999 was travel high, posting strong gains, prompting inflationary fears and a hard look-over of the situation by Federal Reserve Chairman Alan Greenspan. However, the numbers are extraordinary. The Gross Domestic product surged at an annual rate of 4.8% in the third quarter of 1999. The employment cost index, which measures total compensation pay to workers in a broad sampling of jobs, rose by 3.1 share over the past 12 months. (Allen, 71) But, cautions Princeton economist Alan blinder, this is a change in the measurement system, not in the reality. (Allen, 71) Still, he concedes, the underlying reality was spirit good even in the older data. (Allen, 71) Even in this obviously booming economy, Greenspan warns It is not clear whether interest rate hikes the Federal Reserve has already made will suffice to prevent overheating of the economy (Allen, 71)APPLICATIONIn the case of OPECs decision to cut supply to raise prices, it is clear that all sectors of the economy will be stirred in some way.