Home' Trinidad and Tobago Guardian : August 29th 2015 Contents A17
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NEW YORK---Oil prices
surged again Friday, a day
after recording their biggest
gain in more than six years.
West Texas Intermediate
(WTI) crude rose 6.3 per cent
to finish at US$45.22 per
barrel after climbing 10.3 per
cent on Thursday. That was
the biggest one-day jump for
US oil since March 2009.
The gains ease some con-
cerns about the economic
impact of falling oil prices on
oil-producing regions and
the economy at large.
Brent crude, a benchmark
for international oils im-
ported by US refineries, rose
5.2 per cent to US$50.05 a
barrel. Brent also rose 10.3
per cent Thursday. The price
of WTI crude has been trad-
ing at six-year lows because
of a global supply glut and
worries about the health of
Oil prices started tumbling
about a year ago because of
rising supplies and sluggish
growth in the world econ-
omy. The price of US oil av-
eraged more than US$90 a
barrel from 2011 -2014. (AP)
Prime Minister Kamla Persad-Bissessar
expects oil prices to stabilize soon despite
its continuous slide over the last year.
"We are at a time when there are chal-
lenges. There have been challenges over the
last several years, especially over the last
six months with respect to our revenue
streams from the oil and gas. We have been
so dependent on the oil and gas sector for
so long that we are subjected to external
"We are experiencing now the external
shock of price shocks. However, we are fairly
optimistic that that downward trend will
stabilise," she said.
Persad-Bissessar, who spoke yesterday at
a discussion hosted by the T&T Manufac-
turers' Association (TTMA) at the Arthur
Lok Jack Graduate School of Business, Mt
Hope, said prudent management of the
economy is needed combat these problems.
"When we came to office in 2010, there
were two black holes---the Clico debt and
the Hindu Credit Union (HCU) debt---but
we were able to stabilise that. During the
last five years we have not had any major
instability, whether it is in the economy or
"This inspite of all the marches and
protest demonstrations, they never mate-
rialised. If people are comfortable they do
not want to get involved in shutting down
the country," she said.
Even with low energy prices, she said,
T&T can still boast of strong economic fun-
"We have been able to keep a strong
dollar. Our macro economic fundamentals
are very strong. We have six months import
cover, our gross domestic product (GDP) is
"While the macro economy is great the
micro factors are also important to me and
we manage to maintain social safety nets,"
the prime minister said.
Persad-Bissessar also said that T&T has
experienced high foreign direct investment
(FDI) over the last five years with US$1.5
billion inflows annually since 2012.
Commenting on plans for the manufac-
turing sector, she said: "We see manufac-
turing as a very vital part of the T&T econ-
omy. Our intention is to double exports of
locally manufactured goods and double the
contribution to GDP by 2020."
Cutting subsidies on oil and gas cannot be
avoided if T&T is to reduce its expenditure to
cope with declines in global markets, Mariano
Brown, former Minister in the Ministry of
Finance said yesterday.
"The real difficulty is not premium (gas). In
fact, premium at this moment needs a reduction
in price because it is probably trading at a price
which is higher than the world price as we speak,"
he told reporters yesterday on the sidelines of
a Powerful Ladies of T&T (PLOTT) networking
luncheon and roundtable discussion at the T&T
Brown said the biggest issue with subsidies is
in diesel and that's the area that has to be
"There are serious implications. The issue is
how you will do it, what are the things you will
offset, what are the compensating measures.
That's why you can't look at any one alternative.
It has to be a package of measures, not one meas-
Commenting on plans for a downward revision
of the oil price on the national budget is pegged
to US$40 a barrel, Brown said that would not
make much of a difference.
"What is important is how much money is
coming in and out and how it is going to be
spent. In other words, what is our gross revenue
likely to be and therefore how much money can
we realistically spend?"
He added that there is going to have some
level of borrowing and a decision about "what
you are cutting."
"Between now and October 30, it will be a
very interesting period from a finance point of
view," he said.
On Tuesday, Prime Minister Kamla Persad-
Bissessar said Government plan to revise the oil
price from US$45 to US$40 a barrel.
Brown said the declining international markets
as a result of stock volatility in China has already
started to impact T&T's economy.
"The fall in China's demand internationally
means that the prices of commodities are falling,
it is just that it is coming back down to more
normal levels. Unfortunately, we've gotten accus-
tomed to prices at high levels which has fueled
our economy and in a sense fueled our income.
This is an adjustment period and the level of
income is not likely to be as high as it were in
Continuous changes means that the Govern-
ment of the day has to create dialogue so the
population can get an appreciation of how it can
affect them, he said, adding that there is not
enough political will to get the dialogue mov-
Oil prices climb again after Thursday's surge
Oil prices will stabilise
Prime Minister Kamla Persad-Bissessar gives past president of the T&T Manufacturers' Association (TTMA) Anthony Aboud a
five after taking part in discussions hosted by the group at the Arthur Lok Jack Graduate School of Business, Mt Hope, yesterday.
At left are KC Confectionary export officer Miguel Bermudez and Anthony Rahael, right. Partly hidden at centre is the TTMA's
current president, Dr Rolph Balgobin. PHOTO: NICOLE DRAYTON
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