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Lower oil prices undermine prospects for industrial regions in the US — FRS

January 15, 2015, 10:00 UTC+3 WASHINGTON
The Federal Reserve System still draws on the notion that the reduction in price of energy will eventually be profitable for American consumers and the national economy
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© EPA/BOB PEARSON

WASHINGTON, January 15. / TASS /. Lower oil prices impair the economic prospects for a number of industrial regions in the United States , where oil and gas production is concentrated, this information was confirmed on January 14 after the release of the Federal Reserve System new ”Beige Book”.

The Beige Book is published 8 times a year, and what is more formally called the Summary of Commentary on Current Economic Conditions. The document focuses on assessing the status and prospects of economic development in the 12 US banking regions.

The Dallas district reported that Texas Energy companies predict a fall in demand for its products in the range of 15%-40%, thus the companies are planning potential lay-offs.

According to the report, a significant reduction in drilling activity, employment and capital expenditures is expected in the Kansas Region, where companies have been complaining about decreased financing options.

The Minneapolis District reported that oil and gas exploration projects in Montana and North Dakota have been cancelled.

However, overall, the FRS still draws on the notion that the reduction in price of energy will eventually be profitable for American consumers and the national economy .

Infographics Oil prices over 30 years Oil prices over 30 years
Year-average inflation-adjusted oil price. Infographics by TASS

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