US Slowly Opens Oil Exports

Companies in the automotive industry and engineering sector said they cannot afford the union’s demands.

There are fears that the strike could have a big impact on the construction of two major power stations that are already behind schedule.

The country’s sluggish economic growth has been blamed in part on electricity shortages and the government has urged the unions not to go on strike.

“We are going to support all the affected parties to make sure this strike doesn’t take place,” said Communications Minister Faith Muthambi during a briefing in parliament.

Thousands of miners at South Africa’s biggest platinum mining firms returned to work earlier this week.

The US has restricted most crude exports since mid-1970s, in response to the Arab oil embargo.

While there have been calls for the restrictions to be eased, some have cited concerns that any such move may see fuel prices in the US rise and hurt domestic businesses and consumers.

However, some analysts said that the latest decision was unlikely to have an impact on domestic fuel prices.

“It’s not credible to say that if we export more condensates that would cause a spike in prices at the pump,” said Eric Lee, a commodity strategist with Citibank.

Meanwhile, analysts also suggested that the ruling could see other firms take a similar route of processing oil in order to make it eligible for exports.

Such moves, they said, could see US oil exports increase in the short term.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza