Articles tagged with "financial times"
Posted by Euan Mearns on October 17, 2011 - 10:02am
Tags: $100 oil, bank of england, debt, energy efficiency, energy policy, euan mearns, financial times, insolvency, interest rates, iranian revolution, m. king hubbert, oecd, peak oil [list all tags]
David Cameron describes the economic downturn as "no normal recession" UK Prime Minister David Cameron to party conference, 5th October 2011.
This is the fourth post in the series following the oil price, markets and general health of the global economy examining the simple theory that OECD recession may result from annual average oil price exceeding $100 / bbl.
The annual average price (AAP) of Brent went through $100 on around 16th August 2011 and the AAP stood at $105.3 on 12th October. The AAP high point in the 2008 price spike was $104.8 on 9th October that year.
Below the fold are observations and commentary on debt, economic growth, interest rates, commodities prices and government policy. This is not intended to be quantitative analysis but instead is intended to provide a platform for discussion in the comments.
The general and simplified theory to be tested in this series of posts is that OECD economies cannot grow with average annual oil price over $100 / barrel. As of 16 August 2011, the annual average for Brent stood at $100.04 per barrel! Are there any signs that the global economy is buckling under this strain?
Disclaimer: the author does not currently hold any energy related investments that may be affected by the content of this post. Any forward-looking observations and comments should not be viewed as forecasts. I will return to this subject with updated charts as the story unfolds.
On two past occasions, the average annual oil price has hit $100 per barrel and this has been followed by recession. At time of writing (7th July) the annual average for Brent was $95.4, on course to breach $100 some time in September. Will history repeat itself? Or has the global economy grown immune to high energy prices?