Are the United States and other countries facing a looming threat of another oil-related recession? Prior to the economic crash in 2008 the price of oil steadily increased. As the world margin between supply and world demand approached zero, oil prices rose. When this margin went to zero, oil prices hit $147/barrel and the recession began.
Unlike many politically initiated oil recessions of the past, a major recession trigger in 2008 was a “physically” initiated event — the disappearance of the margin between world supply and demand. Physically initiated oil recessions do not have the post-peak, national, debt-free “stimulus package” of low oil prices, and so high unemployment lingers. The International Energy Agency now forecasts a global demand of 90.7 mb/d for 2013 and global supplies in January 2013 fell to 90.8 mb/d. Gasoline prices are again rising at the pump. Are we repeating the run up on oil prices we saw in 2008?
Do you agree with this assessment of world oil supply and demand? Is it possible for the U.S. to shield itself from the effects associated with the oil supply and demand margin approaching zero?
The spike in oil prices in 2008, followed by an equally precipitous crash, was more of a symptom than a cause of a broader debacle in global financial systems. Various… Read more »
I thank Dr.Perelmann for his comments on “Another Oil-Related Recession”. I believe we are viewing the impact of oil from two different time frames. I have no doubt that the various… Read more »
Specter’s argument, like Bruce Dale’s (about which I will have more to say another time), rests to a large extent on the common error of confusing correlation with causation. By… Read more »