Chart du Jour: Oil price spikes in perspective
With crude oil prices having surged over the past ten days, Chart of the Day has just produced a long-term chart of the inflation-adjusted price of West Texas Intermediate Crude, providing an interesting perspective.
The graph illustrates that most oil price spikes coincided with Middle East crises and often preceded or coincided with a US recession. “The logic behind this is that a Middle East crisis can potentially disrupt an already tight oil supply and thereby drive crude oil prices higher. Also, rising oil / energy prices can, among other things, increase costs within the global economy’s supply / distribution chain and thereby contribute to inflation which can in turn encourage governments to halt or reduce any plans to stimulate the economy,” says the report.
Source: Chart of the Day, July 8, 2011.
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