By Alex Plough December 12, 2014
Oil Boom in North Dakota © David
Oil Squeeze
Plummeting crude oil prices are putting a squeeze on major US energy companies, with many firms scaling back investments and drilling plans, and laying off workers, the Wall Street Journal reports.
On Wednesday, the price of Brent crude oil plunged to a five-year low of $64 a barrel. Analysts blame a supply glut in oil markets following massive new oil field discoveries in North Dakota and Texas. The US Energy Information Administration report released last week estimated that total discoveries have jumped from 3.7 billion barrels in 2011 to 5.5 billion barrels in 2013.
Investors are now questioning whether the great American oil boom has peaked, as the break-even points for a number of drilling projects edges closer. Business Insider recently shared a chart from Citibank showing how low prices can go before US shale oil producers are squeezed out. Meanwhile, Bloomberg’s data team produced an interactive data visualization, “America is Shaking Off its Addiction to Oil”, which let’s you explore the key numbers in-depth.
Uber Unsafe
It has been another roller coaster week for the on-demand taxi service Uber. Just days after closing a $1.2 billion round of financing, which valued the company at a stupendous $40 billion, Indian authorities banned the app from the capital New Delhi after an Uber drivers was accused of raping a female passenger. According to Delhi police, the driver in question was a career criminal who was out on bail for sexually assaulting a woman.
The incident sparked protests across the Indian capital and raised questions about Uber’s vetting procedure for new drivers. Uber later acknowledged that it does not carry out background checks on its drivers in India. Delhi officials said that the alleged rape had nothing to do with Uber’s suspension, claiming that the start-up was operating without the correct permit.
The backlash against Uber has spread to other cities such as Portland, Oregon, and Melbourne, in Australia. In all three cases Uber has been accused of operating illegally and skirting regulations designed to protect passenger safety.
Mall of America, © jpellgen
U.S. Rebound in 2015?
Americans who asked Santa for some good economic news should be feeling festive this week, after a series of data releases pointed to a rebounding US economy in 2015.
On Thursday, the US Census Bureau released a blockbuster report showing that total retail sales rose 0.7 percent in November across almost all retail categories. Analysts had expected a rise of only 0.4 percent.
The news comes a week after November’s monthly US job’s report which record a surprise jump in wages and a hiring surge of 321,000 new workers added to payrolls, the biggest in three years.
“It’s pretty impressive,” Ethan Harris, co-head of global economics research at Bank of America Corp. in New York, told Bloomberg. The jump in payrolls “is the kind of number you get in a booming economy.”
A stronger job market and lower oil prices set the stage for fastest economic growth in a decade next year, according to a panel of top economists.
The National Association for Business Economics, an international group of economists and policy-makers, predicted this week that the US gross domestic product (GDP) should expand by 3.1 percent next year, which would be the strongest GDP growth since 2005.
Despite all these positive signs, many in the US feel that the quintessential “American Dream” is out of their reach, according to a poll by the New York Times.
Sony Spat
Angelina Jolie, © Gage Skidmore
Sony Pictures, the US movie studio targeted by hackers last month, faces fresh humiliation this week after hackers leaked personal emails revealing foul-mouthed rants by studio executives about some of Hollywood’s leading players.
One particularly toe-curling exchange between Amy Pascal, Sony Pictures co-chairman, and the controversial film producer Scott Rudin, concerns the shelved film biopic of former Apple CEO Steve Jobs.
Superstar Angelina Jolie was at the centre of the row, after she objected to David Fincher directing the Jobs movie instead of her version of Cleopatra. Pascal went on to call Jolie a “Spoiled Brat” with a “Rampaging Spoiled Ego.” Read Gawker’s Defamer blog for more about the spat.
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Alex Plough is a freelance business journalist based in New York. Originally from London, England, he has a background in data-driven investigative reporting and has worked on a number of agenda-setting projects such as the award winning Iraq War Logs for the Bureau of Investigative Journalism. More recently he graduated from Columbia Journalism School’s masters program, business and economics reporting concentration, as well as Columbia’s Lede Program – a three month course designed to apply the tools of computer science to journalism. He is particularly interested in the overlapping fields of finance, technology and how young people are shaping the new American economy.
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