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Bank economists forecast 2015 economy
BOARDMAN
The oil and gas market was a constant topic brought up during the economic forecast breakfast hosted by the Youngstown/Warren Regional Chamber.
Economists from most of the Mahoning Valley’s major banking institutions discussed what to expect in 2015 at Mr. Anthony’s Banquet Center on South Avenue on Thursday.
Overall, 2014 was the year Americans were more confident in their financial prosperity, said Brad Hansen of Talmer Bank and Trust.
Hansen pointed out that oil prices have declined due to a surplus from U.S. production in the shale plays. The price of crude oil has declined from $105 in June to about $53.
Oil prices also have affected the stock market, said John Augustine of Huntington National Bank.
“Just substitute energy for dot-com,” he said.
Dot-com refers to the emergence of Internet companies in the late 1990s, which helped the economy. The economic trend with stocks, bonds and gold during that time period are similar to current levels, he said.
“Energy prices are one of the biggest surprises of the year,” said Renee Laychur, senior vice president of First National Bank.
Laychur said Organization of the Petroleum Exporting Countries’ refusal to cut back on production kept the supply high despite weaker global demand, causing prices to drop. Gas prices have declined for 13 consecutive weeks, but they have started increasing, she said.
The decline in oil prices would hurt high-cost production in Ohio and Pennsylvania’s shale plays, Laychur added. Ohio’s Utica shale, however, carries mostly natural gas.
Other factors affecting the international economy in 2014 were the sluggish Eurozone, threats from the Islamic State, the Russia/Ukraine conflict, and pandemics, said Peter Bates of PNC Bank.
Tom Humphries, the chamber’s president and CEO, said the economists’ presentation helped explain how the international economy affects the Valley’s economy.