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To: Mark Bartlett who wrote (30266)	3/17/1999 9:46:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116795

Wages threat to US economy US shops turn in the profits as consumers keep the economy booming The US central bank, the Federal Reserve, has said that the country's economy is continuing to strengthen despite many of its trading partners being mired in recession. But the bank warned that the booming economy was putting inflationary strain on wage demands which were rising faster than in recent months. The bank's findings were published in its periodic Beige Book which reports on the state of the country's economy. The report says: "The districts reported some further gains in economic activity in January and February, despite weakness in agriculture and a few manufacturing industries," It says finding qualified workers has become more difficult in several districts, and there are increased reports of wage increases in recent months. The report's findings will be discussed by Federal Reserve policy-makers when they meet next on 30 March to consider US interest rate strategy. Despite the wage pressure, the report said there was still little pressure from prices. It said many businesses were reluctant even to ask for price increases. It also noted that low farm commodity prices were hurting the country's agricultural sector and putting a rising number of farmers under financial stress. Shoppers still confident The Fed survey said consumers had continued to shop with gusto since the record-breaking Christmas period. This had been helped by price discounting and mild weather. It also said manufacturing was expanding in most parts of the country, but noted that low energy prices and competition from keenly-priced imports were hurting textiles and energy-related industries. news.bbc.co.uk

To: Mark Bartlett who wrote (30266)	3/17/1999 9:49:00 PM
From: goldsnow	Read Replies (2) \| Respond to of 116795

Crude Oil Jumps 4% on Saudi Production Cuts, Rise in Demand for Gasoline Crude Oil Rises on Saudi Sales Cuts, Gasoline Demand (Update3) (Adds trader's comment beginning in 7th paragraph.) New York, March 17 (Bloomberg) -- Oil prices climbed 4 percent as increasing demand for gasoline and sales cuts by Saudi Arabia sent crude to its first close above $15 a barrel since October. Saudi Arabia, leader of a global campaign to reduce supplies, will cut sales to most customers by 12 percent next month, an official of state-owned oil company Saudi Aramco said. Crude rose earlier after a report of the biggest weekly decline in U.S. gasoline inventories in five months. ''This is a sure sign that the Saudis are being active in enforcing'' an agreement last week by producers to cut world oil supplies by 2.7 percent, said Victor Yu, an analyst at Refco inc. in New York. ''The bigger the cut in production made by the Saudis, the more credible the agreement is.'' Crude oil for April delivery rose 59 cents, or 4.1 percent, to $15.05 a barrel on the New York Mercantile Exchange, the highest closing price since Oct. 7. Prices have risen 25 percent this year on speculation that producers will cut output enough to ease a global supply glut. Prices still are 44 percent below the highs of 1997, before weakening economies in Asia eroded demand. Some traders are skeptical producers will keep their promises. ''We haven't see output reductions yet,'' said Chris Schachte, a trader at GSC Energy Corp. in Atlanta. ''We may not see crude stay above $15 a barrel.'' In London, May Brent crude rose 59 cents to $13.27 a barrel on the International Petroleum Exchange, the highest since Oct. 9. Saudi Arabia has promised to reduce oil output by 585,000 barrels a day as part of wider cutbacks of about 2 million barrels a day pledged by more than a dozen countries. The cuts are to be ratified at the Organization of Petroleum Exporting Countries meeting in Vienna next week. Oil prices also were buoyed by signs that Russia, the world's third-largest producer, will join in the output-reduction effort, traders said. Announcement Tomorrow Russian Fuel and Energy Minister Sergei Generalov said Russia will reduce its exports of both oil and oil products, the Russian news agency Interfax reported. Generalov said the size of the cuts would be disclosed tomorrow. Russia's cuts probably will be far smaller than those planned by Saudi Arabia and other big producers, based on past experience. A report late yesterday from the American Petroleum Institute showing a greater-than-expected 3 percent drop in U.S. gasoline inventories last week sent gasoline futures to a five- month high and contributed to crude's gains. Strong demand for gasoline during the warm-weather driving season would help revive a market reeling after mild winter weather reduced U.S. demand for heating oil. ''If demand is this good this early in the season then what will it be like later?'' said Michael Fitzpatrick, a trader at Fimat USA Inc. in New York. Gasoline for April delivery rose 2.53 cents, or 5.7 percent, to 47.20 cents a gallon on the New York Mercantile Exchange, the highest closing price since Oct. 6. April heating oil rose 1.91 cents, or 5.1 percent, to 39.68 cents a gallon, the highest since Oct. 7. Gasoline inventories fell 6.98 million barrels last week to 226.2 million barrels, the biggest drop since the week ended Oct. 9, the API said after markets closed yesterday. The largest drop expected by eight analysts surveyed by Bloomberg News before the report was 2.5 million barrels. Gasoline Demand The big inventory drop came as demand for gasoline, as calculated from other figures in the API report, surged 17 percent to 9.02 million barrels a day, the highest rate in 10 weeks. U.S. gasoline demand is strongest during warmer months, when more motorists take to the roads. A separate report today from the Department of Energy showed a smaller 3.8 million-barrel decline in gasoline inventories. Distillate fuel inventories, which include heating oil, fell a larger-than-expected 4.5 million barrels, the API report showed. The declines in petroleum product supplies more than offset a rise in crude oil inventories, which was concentrated on the West Coast, considered a less important region by futures traders because it's not connected by pipeline to the rest of the country. ''Stockpiles of crude are now substantial as the API report showed,'' GSC Energy's Schachte said. ''Inventories are at their highest since November.'' ©1999 Bloomberg, LP. All rights reserved. Terms of Service and Trademarks.