Financial and Economic Brief - November 14, 2017by © Liberty Publishing, Inc.
Oil Prices May Stay Steady
Oil prices have been rising since June, increasing about 33%. British Petroleum (BP) boss Bob Dudley says that may be all for now. “I don't expect there to be a real spike in the markets barring some geopolitical event,” Dudley told CNNMoney. “…we're in the $50-$60 range until the end of the decade.” U.S. crude futures are currently trading at around $56 a barrel, and Brent crude is trading higher at $63. Oil prices have recovered since the oil crash in 2014/2015 thanks to supply curbs agreed to by OPEC members and Russia, a year ago. The deal will end in March 2018. A global economic recovery has also helped.
Coal’s Bleak Future
Coal’s long-term prospects for growth and hiring are bleak. The industry has seen only modest gains in jobs and production this year, mostly from a temporary uptick in foreign demand. U.S. utilities are rapidly shutting coal-fired power plants down and changing to natural gas, along with wind and solar power. President Trump’s Energy Secretary, Rick Perry, is attempting to push a rule through that would subsidize power plants that store at least a 90-day supply of coal on site. U.S. coal production is on track to rise more than 8% in 2017 over the previous year, according to the Energy Information Administration. But 2018 output is expected to decline.
Qualcomm Rejects Takeover Proposal
Qualcomm recently rejected Broadcom's $103 billion takeover proposal, noting the bid “significantly undervalues” the wireless telecommunications company. The combined company would create a global communications tech giant with about $51 billion in annual revenue and major customers such as Apple. Prior to making its bid for Qualcomm, Broadcom announced it would move its legal headquarters from Singapore to Delaware. Both companies are in the middle of other acquisitions, as well. However, Qualcomm is prepared to move forward on its own, or await a more “suitable” offer.