Wednesday, September 29, 2004

NewsClip/Analysis: Oil is not well ...

"Oil lingered above the $50 per barrel threshold in Asian trade Wednesday, breaching the mark for the second straight day ahead of key U.S crude stockpile data."

Read more ...

Doubleplusungood. As Alan Reynolds of the Cato Institute notes, "every time oil topped $35 in the past -- in1980-82, 1990 and late 2000 -- industrial production soon began to fall in the largest industrial economies, including the United States." Crude has been at $35+ since April.

Granted, there's an inflation factor -- oil is cheaper right now than it was at the 1981 high point -- but it's still 70% more expensive than it was a year ago. It's been a problem for awhile, and it's getting worse. To the extent that there's an economic recovery occurring, oil prices are retarding that recovery.

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