US grew 3.8 percent in 4th quarter, but high oil price threatens

US real gross domestic product for the fourth quarter of 2004 has been revised to 3.8 percent from the previous estimate of 3.1 percent, according to the latest release by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.0 percent.

This means that the US economy barely slowed in the fourth quarter. But things are not looking so good going forward.

Saudi Arabia, the world's largest oil producer, suggested on Thursday that oil prices would be between US$40 and US$50 a barrel for the rest of the year. Prices have hovered between US$51 and US$52 a barrel over the past few days. It now looks like it will stay around these levels for quite a while, contrary to the expectations of many analysts that it will fall to around US$40 or below later this year.