Working with members of OPEC and the potential for offsetting oil shortages using emergency crude reserves should be enough to keep oil prices from spiraling out of control in the U.S., according to the country’s chief business lobbyist.
Speaking at a press conference on Sept. 16, U.S. Chamber of Commerce CEO Tom Donohue said the drone attacks on Saudi Arabia’s oil processing facilities over the weekend are causing concerns about oil prices beyond short-term spikes.
“However, President Trump has indicated willingness to deal with our national oil reserves to balance some of that, and I’m sure we’ll move together with OPEC to produce more oil as necessary,” Donohue said.
“I think in the next few days we’ll have a much better feeling for the Saudis to get their system up and going again, and I think it’s going to result in others being very careful and more alert to protecting their resources. Collectively with Canada and Mexico, we’re very significant and can be helpful in this beyond what others are used to. I think we’ll be alright.”
While Trump reportedly authorized a release of the U.S. Strategic Petroleum Reserves “if needed,” Secretary of Energy Rick Perry told CNBC today it’s “premature” to know whether such action is warranted.
Donohue also commented on the potential for the U.S. to fall into a recession, based on uncertainty stemming from U.S.-China trade tensions, on warning signs in the bond markets, and on the general softening of the global economy. “When people get nervous, they sit on their money. A lot of companies are sitting on their cash resulting in the first decline in investment in three years, and individual investors are doing the same thing,” Donohue warned.
To avoid a recession, Donohue pointed to three issues that could make a difference: resolving trade issues with China, passing an infrastructure package, and signing off on the United States-Mexico-Canada Agreement (USMCA). Donohue had met with U.S. Trade Representative Robert Lighthizer just before the press conference.
“[Lighthizer] said there’s much more work to be done [with China], and the Chamber continues to work with Chinese and U.S. business leaders to move in the right direction,” Donohue said. However, “an agreement [with China] that doesn’t take care of intellectual property issues will be hard to get done. While I’m optimistic about it, I’m also a realist, and this is not a simple problem.”
On infrastructure, Donohue said he was confident that a partial infrastructure bill being supported by a bipartisan group of U.S. Senators that would be limited to funding roads, bridges, and transit could get passed before the end of the year. “It’s only a small but very important part of the total infrastructure deal, so there’s a way to get this done. I’m very hopeful we can sneak this under the finish line” before the end of the year, he said.
As for the USMCA, Donohue and Arizona Governor Doug Ducey, who also attended the press conference, acknowledged that there was still work to do to get a trade agreement in place that addresses labor issues in Mexico that is still a concern of a group of Democratic holdouts.
“Everybody would like [an agreement] to be set up by the end of thos month, and then finalized in a few weeks following that,” Donohue sad. “I can’t promise that because there’s so many other things going on, but I believe long before we start looking at the holidays we’ll have this thing done.”