Showing posts with label WTI. Show all posts
Showing posts with label WTI. Show all posts

Tuesday, October 20, 2015

What really happened to the economy when oil prices crashed?

Is it true that the oil price crash did not translate into higher consumption?

This graph below tells the story. Starting from Q2 2014 when the price of WTI crude was $105 (green line). You can see that Personal Consumption Expenditures (blue line) rose by an additional $353 billion, cumulative, over the ensuing four quarters.
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The reddish brown line is Non-Residential Private Domestic Investment. Even that rose, though not by much. (Oil effect.)

The economy grew more slowly because imports increased so yes, there was leakage. However, demand was strong.

Personal Consumption/WTI/Mike Norman Economics

Thursday, December 6, 2012

Christian Schmollinger and Ramsey Al-Rikabi — Brent Favored Over WTI Oil by U.S. for First Time

Even the U.S. Energy Department no longer deems America’s benchmark oil grade the best guide to global prices, as rising production swells national stockpiles.
The Energy Information Administration in Washington dispensed with West Texas Intermediate for its price forecasts in its Annual Energy Outlook 2013 released yesterday, adopting North Sea Brent crude instead. It’s the first time the department has used Brent, reflecting “a growing discrepancy” between WTI and global crude prices, it said.
Bloomberg BusinessWeek
Brent Favored Over WTI Oil by U.S. for First Time
Christian Schmollinger and Ramsey Al-Rikabi
(h/t Chris Cook via Twitter)