US economy expanded in 4Q as consumers kept spending

  • Spanish Market: Biofuels, Chemicals, Coal, Crude oil, Electricity, LPG, Metals, Natural gas, Oil products
  • 26/01/23

The US economy grew more than most analysts expected in the fourth quarter as consumers kept spending amid robust job growth and signs of slowing inflation.

The economy grew at a 2.9pc annual rate in the fourth quarter, slowing from a 3.2pc rate in the third quarter, according to the advance estimate from the Bureau of Economic Analysis. The economy contracted by 1.6pc in the first quarter and by 0.6pc in the second quarter.

The slump in the first half of last year raised concerns the economy was in, or headed toward, recession as inflation surged to four-decade highs amid spiking fuel costs prompted in part by the war in Ukraine, ongoing strains to supply chains and slowing global growth.

Sharp interest rate increases by the Federal Reserve have slowed inflation but concerns remain that the economy could slide into recession this year even as a robust labor market is supporting spending.

For the full year, the economy grew by 2.1pc following 5.9pc growth in 2021, the year of the post-Covid-19 rebound. The economy shrank by 2.8pc in 2020 on a brief Covid-induced recession.

The increase in gross domestic product in the fourth quarter reflected gains in private inventory investment, consumer spending, federal and state spending and nonresidential spending that were partially offset by decreases in residential investment and net exports.

Consumer spending growth slowed to a 2.1pc rate in the fourth quarter from 2.3pc in the third quarter.

Fixed investment spending fell at a 6.7pc annual rate in the fourth quarter, with residential investment down by 26.7pc, reflecting the hit to housing from the most aggressive Fed rate increases since the 1980s.

Federal spending rose at an annual 6.2pc rate and state and local spending rose by 2.3pc. Exports fell by 1.3pc while imports fell at a 4.6pc annual rate in the fourth quarter.

By Robert Willis


Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

26/04/24

High inventories pressure Brazil biodiesel prices

High inventories pressure Brazil biodiesel prices

Sao Paulo, 26 April (Argus) — Logistical differentials for Brazilian biodiesel contracts to supply fuel distributors in May and June fell from March and April values, reflecting higher inventories and a bumper crop of soybeans for crushing, which could increase vegetable oil production. The formula for the logistics differential of plants includes the quote of the soybean oil futures contract in Chicago, its differential for export cargoes in the port of Paranagua and the Brazilian real-US dollar exchange rate. It is the portion in the pricing linked to producers' margin. Negotiations for May and June started with plants seeking higher values to recover part of the losses incurred by unscheduled stops , the result of retailers' delays in collecting biodiesel. But the supply glut has not abated, leading to a drop in prices. With higher inventories in the market, fuel distributors stuck close to acquisition goals established by oil regulator ANP for the May-June period. Sales are expected to gain traction over the next two months, as blended diesel demand traditionally gets a seasonal boost from agricultural-sector consumption linked to grain and sugarcane crops. The distribution sector expects an extension of the current supply-demand imbalance, exacerbated by significant volumes of imported diesel at ports and lower-than-expected demand. The situation has generated concern among many participants, who see this trend as a potential sign of non-compliance with the biodiesel blending mandate. ANP data show that the compliance rate with the Brazilian B14 diesel specification dropped to 83.4pc in April from 95.2pc in March, reaching the lowest level since the 2016 start of monitoring. Non-compliance with the minimum biodiesel content accounted for 67pc of the infractions recorded during the period compared to a historical average rate of 47pc. The recent end to a special tax regime for fuel importing companies offered by northern Amapa state's secretary of finance should end a significant source of diesel price distortions and help rebalance supply in the country. Variations The steepest decline in differentials took place in northeastern Bahia state, where premiums for the period ranged from R600-830/m³ (44.35-61.35¢/USG), down from R730-1,020/m³ in the March-April period, according to a recent Argus survey. In the northern microregion of Goias-Tocantins states, the premium range also dropped by around R142/m³ to R300-535/m³ from R440-680/m³. By Alexandre Melo Brazil biodiesel plant differentials R/m³ May/June March/April ± Low High Low High Rio Grande do Sul 110 380 280 450 -120 Sorriso-Nova Mutum 50 340 220 350 -90 Cuiaba-Rondonopolis 80 405 280 450 -123 Northern of Goiás-Tocantins 300 535 440 680 -142 Southern of Goias 350 500 450 650 -125 Parana-Santa Catarina 150 450 400 480 -140 Bahia 600 830 730 1,120 -210 Source: Argus survey Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Etanol hidratado impulsiona início da safra 2024-25


26/04/24
26/04/24

Etanol hidratado impulsiona início da safra 2024-25

Sao Paulo, 26 April (Argus) — A produção de etanol no Centro-Sul aumentou 7,2pc na primeira quinzena de abril em relação ao ano passado, com produtores ainda favorecendo o hidratado em meio à demanda crescente. As usinas da região entregaram 841.000m³ ao mercado na primeira quinzena da safra de 2024-25, em comparação com 784.000m³ no mesmo período do ano anterior, segundo os dados mais recentes da União da Indústria de Cana-de-Açúcar e Bioenergia (Unica). A produção de etanol hidratado subiu 39pc e impulsionou a alta anual, totalizando 693.000m³. Já o processamento de anidro, utilizado como mistura na gasolina, caiu 48pc, para 174.000m³. As usinas permanecem destinando mais matéria-prima para o E100, em um cenário de paridade favorável para o biocombustível frente à gasolina na bomba. O hidratado está mais vantajoso para os motoristas em 80pc do mercado de combustíveis leves, disse a Unica. As plantas do Centro-Sul venderam 1,3 milhão de m³ de etanol para o mercado doméstico em abril, salto de 41pc na variação anual. As vendas de hidratado representaram 902.355m³ deste total, alta de 61pc, enquanto as de anidro subiram 14pc, para 448.431m³. Já as exportações totalizaram 52.104m³, queda de 6,2pc. O mix de produção na quinzena foi de 56,4pc para o etanol e 43,6pc para o açúcar, em comparação com 62pc para o biocombustível no mesmo intervalo em 2023. No período, a moagem de cana-de-açúcar avançou 14pc, para 15,8 milhões de t, à medida que a temporada inicia suas operações. Até 16 de abril, 171 usinas estavam operando no ciclo de 2024-25, número maior do que as 166 no mesmo intervalo do ano anterior. A Unica espera que mais 54 unidades recomecem as atividades durante a segunda metade do mês. O etanol à base de milho representou 32pc do volume total produzido na primeira parte de abril, somando 270.500m³, crescimento de 12pc na comparação anual. Por Laura Guedes Envie comentários e solicite mais informações em feedback@argusmedia.com Copyright © 2024. Argus Media group . Todos os direitos reservados.

Lyondell Houston refinery to run at 95pc in 2Q


26/04/24
26/04/24

Lyondell Houston refinery to run at 95pc in 2Q

Houston, 26 April (Argus) — LyondellBasell plans to run its 264,000 b/d Houston, Texas, refinery at average utilization rates of 95pc in the second quarter and may convert its hydrotreaters to petrochemical production when the plant shuts down in early 2025. The company's sole crude refinery ran at an average 79pc utilization rate in the first quarter due to planned maintenance on a coking unit , the company said in earnings released today . "We are evaluating options for the potential reuse of the hydrotreaters at our Houston refinery to purify recycled and renewable cracker feedstocks," chief executive Peter Vanacker said on a conference call today discussing earnings. Lyondell said last year a conversion would feed the company's two 930,000 metric tonnes (t)/yr steam crackers at its Channelview petrochemicals complex. The company today said it plans to make a final investment decision on the conversion in 2025. Hydrotreater conversions — such as one Chevron completed last year at its 269,000 b/d El Segundo, California, refinery — allow the unit to produce renewable diesel, which creates renewable naphtha as a byproduct. Renewable naphtha can be used as a gasoline blending component, steam cracker feed or feed for hydrogen producing units, according to engineering firm Topsoe. Lyondell last year said the Houston refinery will continue to run until early 2025, delaying a previously announced plan to stop crude processing by the end of 2023. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Azerbaijan wants certainty from EU on gas needs


26/04/24
26/04/24

Azerbaijan wants certainty from EU on gas needs

London, 26 April (Argus) — Azerbaijan needs long-term guarantees and available financial instruments to invest in gas production growth, its president Ilham Aliyev said earlier this week. Azerbaijan and the EU signed a strategic partnership agreement in 2022, in which Azerbaijan committed to increasing its supply to the EU to 20bn m³/yr by 2027 from 8bn m³ in 2021. This is a "target that we are moving towards" and exports to Europe will be around 12bn m³ this year, Aliyev said on 23 April at the Cop 29 and Green Vision for Azerbaijan forum ( see Azeri gas production graph ). But Azerbaijan needs investments to reach this export target, and restrictions from financing institutions on fossil fuel projects make them harder to realise, Alyiev said. The European Investment Bank has removed fossil fuel projects from its portfolio and the European Bank for Reconstruction and Development has only a small share of such projects, Aliyev said. Corporations tend to finance 30pc of gas production or infrastructure projects on their own and the remainder through loans, he said. The other issue is a need to receive long-term guarantees for Azeri gas supply, as "Azerbaijan cannot invest billions only for 5-10 years and not be able to recover the costs", Aliyev said. Azerbaijan is still paying back loans for the Southern Gas Corridor and Shah Deniz Stage 2 projects, he said. A long-proposed Ionian-Adriatic pipeline that could provide the Balkan region with Azeri gas is yet to materialise because it lacks EU funding support and gas consumption in the countries involved is low, particularly considering the challenges involved with building a pipeline in a mountainous region, Aliyev said. But Azeri gas can already reach Croatia, Bosnia Herzegovina and Montenegro through Hungary, while it can flow to Serbia through Bulgaria, he said. Aliyev said he believes that the Croatian and Azeri governments are already in consultation about this. Referring to a long-mooted project to build a pipeline across the Caspian Sea to deliver Turkmen gas to Europe, Aliyev said that Azerbaijan has "received no messages from Turkmenistan". Azerbaijan as a transit country cannot become the initiator or co-ordinator of a trans-Caspian pipeline project, Aliyev said. The Southern Gas Corridor is fully booked, meaning that infrastructure developments are needed to transport more gas to Europe, which is "under discussion", Aliyev said. Azerbaijan plans renewables build-out Azerbaijan is targeting 5GW of additional renewable generation capacity, which it aims to substitute for gas, releasing this supply for export to Europe, Aliyev said. Azerbaijan's first 240MW solar plant was inaugurated in 2023. It plans to add four new 1.3GW solar and wind projects this year and is considering some offshore and onshore wind projects as well as solar and hydropower plants. Azeri gas consumption for power generation and heating needs increased to 6.6bn m³ in 2022 from 6.1bn m³ in 2020, and made up almost half of domestic consumption in 2022 ( see data and download ). Azerbaijan is in the last phase of a feasibility study for a green energy cable from the Caspian Sea to the Black Sea and then further down to Europe. The project aims to initially connect the Georgian Black Sea to the Romanian coast, and plans to expand it further down to the eastern Caspian and Kazakhstan, according to Aliyev. The state plans to keep investing to strengthen the energy grid to allow it to cope with the renewables build-out. Foreign investors are mainly involved with renewables projects. Oil and gas makes up less than half of Azerbaijan's GDP today, but 95pc of its exports, Aliyev said. By Victoria Dovgal Azeri gas production bn m³ Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US M&A deals dip after record 1Q: Enverus


26/04/24
26/04/24

US M&A deals dip after record 1Q: Enverus

New York, 26 April (Argus) — US oil and gas sector mergers and acquisitions (M&A) are likely to slow for the rest of the year following a record $51bn in deals in the first quarter, consultancy Enverus says. Following an unprecedented $192bn of upstream deals last year, the Permian shale basin continued to dominate first-quarter M&A as firms competed for the remaining high-quality inventory on offer. Acquisitions were led by Diamondback Energy's $26bn takeover of Endeavor Energy Resources. Other private operators, such as Mewbourne Oil and Fasken Oil & Ranch, would be highly sought after if they decided to put themselves up for sale, Enverus says. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more