Articles tagged with "financial times"

Countdown to $100 Oil - No Normal Recession

Posted by Euan Mearns on October 17, 2011 - 10:02am
Topic: Economics/Finance
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.


Figure 1 Data for Brent from the EIA, 1 year moving average roughly equals 5 trading days per week divided by 7 days per week = 261 days. FTSE 100 data from Yahoo. Back in 2007 – 09, the top of the London FTSE 100 index was 6731 on 12th October 2007 (1). The top of the oil price spike was $143.95 on 3rd July 2008, 8 months after the market top (2). Both oil price and markets had declined substantially by the time the Lehman induced crash came in October 2008. The recent high in the FTSE 100 was 6091 on 8th February 2011 (3). The top of the recent oil price spike was $126.64 on 2nd May 2011, 3 months after the market top (4). Data at 12th October.

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Countdown to $100 Oil - Deja Vu?

Posted by Euan Mearns on August 26, 2011 - 2:56pm
Topic: Economics/Finance
Tags: $100 oil, financial times, ftse 100, gavyn davies, peak oil [list all tags]

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.

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Countdown to $100 oil - a date with history?

Posted by Euan Mearns on July 11, 2011 - 11:49am
Topic: Economics/Finance
Tags: eia, financial times, gavyn davies, iea, peak oil, recession [list all tags]

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?


US regular gasoline prices mirror moves in the crude oil market. The overwhelming desire is to bring gasoline and other energy prices down. But politicians and policy makers must understand that if we see $2 gas in the near future it will most likely be due to peak oil recession #2 and that is not what they want. They must start pointing the finger at themselves. Borrowing and printing money creates demand that drives energy prices up.

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