08 Apr 2005 How High Will It Go?
Posted at 15:20h in The Friday BriefThe buzz continues about the potential for increasing oil prices to ruin the economic expansion. Indeed when oil prices fall, stocks go up and vice versa. With crude just under $54.00 economists have had to revise their opinions of what price would trigger recession. According to the Wall Street Journal, last summer, one-third of economists who participated in their survey said a recession would follow if crude-oil stuck between $50 and $59 a barrel, the range traded since late February. In the latest forecasting survey, none of the economists feel that $50 oil will trigger a recession. About 31% said oil would have to be sustained at $80-$89 a barrel to snuff out growth, while 48% believe crude would have to top $90. In inflation-adjusted dollars that is the level oil reached back in the 70’s during the oil embargo.