For the past five months, I’ve grown increasingly concerned about the steady surge in oil prices. Back in November,I noted that several sectors could be affected if oil moved past $100 a barrel. With oil now approaching $110 a barrel, you can forget that qualified statement. Oil will affect various swaths in the economy. Here’s why… Some market watchers suggest oil has only temporarily moved onto a higher plane and that prices will eventually come back down. Then again, they’ve been saying that for the past six… Read More
For the past five months, I’ve grown increasingly concerned about the steady surge in oil prices. Back in November,I noted that several sectors could be affected if oil moved past $100 a barrel. With oil now approaching $110 a barrel, you can forget that qualified statement. Oil will affect various swaths in the economy. Here’s why… Some market watchers suggest oil has only temporarily moved onto a higher plane and that prices will eventually come back down. Then again, they’ve been saying that for the past six months. It’s increasingly hard to see why oil prices will suddenly pull back. “The turmoil in the Middle East is unlikely to be resolved quickly or easily, meaning that oil market volatility is likely to remain high,” analysts at Merrill Lynch say. At this point, the only major catalyst to bring oil prices back down (besides a sudden resolution to all of the Middle East’s troubles) would be a slump in demand. And demand would only fall because oil prices rose so high that they choked off economic activity. Read More