OPEC nations are plowing cash into U.S. Treasuries at a more than 50 percent faster rate than all other foreign investors, an unintended benefit of oil prices above $100 a barrel.
Organization of Petroleum Exporting Country members increased their net purchases of government debt by $43.3 billion, or 20 percent, in the 12 months ended Jan. 31, compared with a 13 percent rise for non-OPEC foreign holdings, Treasury Department data showed last week. With prices up $26 a barrel since Sept. 30, producers have an additional $780 million in profits every day, according to data compiled by Bloomberg.
International investors, which own about $5 trillion, or half of the marketable U.S. government debt outstanding, are key to President Barack Obama’s administration financing a budget deficit forecast to exceed $1 trillion for a fourth year. OPEC’s purchases may help temper a plunge in Treasuries after yields surged last week by the most since January 2009 amid gains in jobs, retail sales, and manufacturing.
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