Oil spiked as investors look forward to the rise in demand for fuel after President Barack Obama’s US$447 bln job-creation plan, and as Tropical Storm Nate, close to becoming a hurricane, nears the Gulf of Mexico. Crude for October delivery inched up to close around US$89.4 a barrel on the Nymex, and in London, Brent oil for October settlement inched up to around US$115 a barrel on ICE.
Obama’s latest job creation plan, designed to help kick-start the currently stalled economy, will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for the long-term unemployed. It will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business. The focus of the plan is a deeper-than-expected US$240 bln payroll tax cut for employers and employees that will keep money in the pockets of those most in need and most likely to spend extra cash to spur demand. For individuals, that tax has been reduced from 6.2% to 4.2% for this year, but will go back up again if the Congress takes no action. Obama wants to keep it and deepen the cut to 3.1% for workers. Obama also proposed a US$50 bln program to invest in infrastructure. He called on the Congress to provide US$10 bln to capitalize a national infrastructure bank to leverage private and public capital to invest in a broad range of projects,