- Title: USA: GREENSPAN SAYS U.S. ECONOMY CAN WITHSTAND RECORD OIL PRICES.
- Date: 16th October 2004
- Summary: (W8) LOS ANGELES, CALIFORNIA, UNITED STATES (OCT. 15, 2004) (REUTERS--ACCESS ALL) 1. LV/GV: CHEVRON GAS STATION; SIGN OF GAS PRICES; PEOPLE PUMPING GAS (4 SHOTS) 0.19 2. SOUNDBITE (English) PAM PARKER OF LOS, ANGELES, CALIFORNIA, SAYING: "I just said to my daughter, when I got in the car, 'Do you believe the price of gas?' And yet I just returned from Europe and they do pay double and they drive smaller cars. I mean when you drive an economy car or an SUV, you can't complain, its your choice." 3. SOUNDBITE (English) BRIAN JELLO OF LOS ANGELES, CALIFORNIA, EXPLAINING HOW HE WOULD FEEL IF HE HAD TO PAY FOR EUROPEAN GAS PRICES, SAYING: "It would not be good news. With an oilman from Texas in the office you would think that would be less on the American public and the European public. But, unfortunately it's not the case and it shows no sign of mitigating." 0.48 4. GV: PEOPLE PUMPING GAS 0.52 5. SOUNDBITE (English) TARA DUNCAN SAYING: "Double in dollars--American dollars? I would hopefully live in a city with public transportation." 6. SOUNDBITE (English) MORGAN HALL ON PAYING EUROPEAN GAS PRICES, SAYING: "I'd be pretty pissed, but seeing how there is no shortage of gasoline there's no reason for the prices to be this high. Its just greed on the oil companies.' (W8) WASHINGTON D.C., UNITED STATES (OCTOBER 15, 2004) (REUTERS - ACCESS ALL) 8. FEDERAL RESERVE CHAIRMAN ALAN GREENSPAN APPROACHING PODIUM 9. WIDE SHOT OF AUDIENCE 10. (SOUNDBITE) (English) FEDERAL RESERVE CHAIRMAN ALAN GREENSPAN SAYING: "Today, despite its recent surge, the average price of oil in real terms, is still only three-fifths of the price peak of February 1981. Moreover the current impact of oil prices, though noticeable, is likely to prove less consequencial to economic growth than in the 1970s. So far this year the rise in the value of imported oil, essentially a tax on U.S. residents, has amounted to about three-quarters of a per cent of GDP. The effects was far larger in the crisis of the 1970s. But obviously, the risk of more serious negative consequences would intensify if oil prices were to move materially higher." 11. GREENSPAN EXITING ROOM (W8) NEW YORK, NEW YORK, UNITED STATES (OCTOBER 15, 2004) (REUTERS - ACCESS ALL) 12. VARIOUS OF OIL TRADERS ON THE NYMEX TRDING FLOOR 13. SOUNDBITE (English) ERIC BOLLING, INDEPENDENT ENERGY TRADER AT THE NEW YORK MERCANTILE EXCHANGE, SAYING: "I think traders were keeping an eye on Greenspan. If he had something real major to say, you would have seen a huge reaction in the markets, and we haven't. We have seen just around unchanged for the day, slightly lower for the day, as of two o'clock. I don't think his comments are bullish or bearish in any way. I think the bigger picture here is the supply picture." 14. OIL TRADERS 15. SOUNDBITE (English) BOLLING SAYING: "How is our heating oil and natural gas picture for the winter? Depending on how that looks, you'll see crude oil follow. If there is a problem, you'll see the whole market go higher. If it seems like the problem is going to alleviate itself, you'll see it come down. The problem is, it could be two or three months before we know what is going on." 16. OIL TRADERS Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 31st October 2004 12:00
- Keywords:
- Location: LOS ANGELES, CALIFORNIA, WASHINGTON, D.C., NEW YORK CITY, USA
- City:
- Country: USA
- Reuters ID: LVA6U11GT8CDCFN3LA2S19LOKYN6
- Story Text: Greenspan says economy can withstand record oil
prices.
Record oil prices are unlikely to inflict the
economic pain they did in the 1970s, Federal Reserve
Chairman Alan Greenspan said on Friday (October 15), adding
that he thought the world could adjust to higher-priced oil.
"The impact of the current surge in oil prices, though
noticeable, is likely to prove less consequential to
economic growth and inflation than in the 1970s," Greenspan
said in remarks prepared for delivery to a luncheon
sponsored by the National Italian American Federation.
"So far this year, the rise in the value of imported
oil -- essentially a tax on U.S. residents -- has amounted
to about 3/4 percent of GDP," the central bank chief said,
while warning: "The risk of more serious negative
consequences would intensify if oil prices were to move
materially higher."
Greenspan said over the long haul, technological
advances and market forces would likely ensure the world
had an adequate supply of oil as it makes an eventual
transition to other energy sources.
U.S. oil futures prices hit a record high of 54.88 U.S.
dollars a barrel on Thursday but Greenspan noted that on an
inflation-adjusted basis, the price remains well below its
February 1981 peak.
Oil futures showed little immediate reaction to
Greenspan's remarks, with crude for November delivery down
46 cents to 54.30 U.S. dollars per barrel.
As prices surged, financial markets have begun to wager
more heavily that the U.S. central bank would soon pause in
its rate hike campaign, which it began in June to move
historically low interest rates to more normal levels.
The Fed has been widely expected to raise overnight
borrowing costs a slim quarter-percentage point to 2
percent at its next policy meeting on Nov. 10.
However, with economic data mixed and oil prices
weighing on consumers, many economists and futures markets
believe the Fed could hold fire at its subsequent gathering
in December.
Greenspan's remarks did little to change those views,
with stock, bonds and foreign exchange markets exhibiting
little reaction.
Traders on the floor of the New York Mercantile
Exchange (Nymex) were unconcerned by Greenspan's remarks.
Eric Bolling, an independent energy trader at the Nymex
said he is looking at the long term picture.
Said Bolling, "I think traders were keeping an eye on
Greenspan. If he had something real major to say, you would
have seen a huge reaction in the markets, and we haven't.
We have seen just around unchaged for the day, slightly
lower for the day, as of two o'clock. I don't think his
comments are bullish or bearish in any way. I think the
bigger picture here is the supply picture."
Bolling said that the next few months are important
and the market is looking at certain key indicators that
could affect prices. "How is our heating oil and natural
gas picture for the winter? Depending on how that looks,
you'll see crude oil follow. If there is a problem, you'll
see the whole market go higher. If it seems like the
problem is going to alleviate itself, you'll see it come
down. The problem is, it could be two or three months
before we know what is going on."
While U.S. motorist are less than thrilled at the
recent surge in gas prices, they feel fortunate when
compared to their European counterparts, who are paying
roughly double when filling up. Pam Parker, of Los Angeles,
said it's all a matter of choice.
"I just said to my daughter, when I got in the car, 'Do
you believe the price of gas?' and yet I just returned from
Europe and they do pay double and they drive smaller cars.
I mean when you drive an economy car or an SUV you can't
complain, its your choice," Parker said.
Brian Jello, whose job it is to keep movie studio trucks
filled up, said he'd be out of the job if forced to pay European fuel
p
rices.
"It would not be good news," said Jello. "With an
oilman from Texas in the office, ou would think that would
be less on the American public and the European public.
But, unfortunately it's not the case and it shows no sign
of mitigating."
Morgan Hall though blames the oil companies.
"I'd be pretty pissed, but seeing how there is no
shortage of gasoline. There's no reason for the prices to
be this high. Its just greed on the oil companies."
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