Publications: Notes at the Margin

Economic Growth: 3.5 Percent Growth Requires Oil at $68/bbl or Less; Brent: The Producer’s Hedge; Dow Chemical: A Parasite and Free Rider on the Energy Sector; and Mexico: Twenty-five Years Too Late and a Few Billion Short (August 19, 2013)


This Notes at the Margin addresses four separate issues. We begin with the linkage between oil prices and GDP growth. First, revised BEA data reveal the US economy has grown at a rate above 3.5 percent in twenty-one of the last forty-four years and that the rate never surpassed that number when oil prices were above $68 per barrel. Second, we note the rise in the merchant short position in Brent futures that could strip billions from the pockets of speculators and money managers. Third, we analyze Dow Chemical’s opposition to natural gas exports, which shows the company is a parasite attempting to free ride on US producers through this action. Fourth, we discuss Mexico's so-called opening of the country to foreign oil firm investment and why it will likely not bring the economic boom Mexican leaders and others expect as a result of this policy change.


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