If the American economy goes into recession... The world economy will go into recession.(most notabley China)
Thus, decreasing world demand for oil
Opec has more control then they let on. What's let on is that they have no control..and that is complete bs.
Oil is a market like any other and is run by big money flows Opec creates top and bottoms..not the consumers buying gas They simply follow it
There is no shortage in oil. There is declining amounts of cheap oil The world will never run out The SPR is full
The U.S uses far less oil then they did in the past
Higher oil prices create those 2 reasons you bring up. They create the opportunities to explore and to pull out expensive oil And create the need to look into alternatives Change social habits etc etc
My theory. The oil price is going up because it's over-all longterm demand is going down. The higher price is to force the change away from it. The world economy is evolving away from oil
The recession will not be from oil. The oil market was lifted with tons of money borrowed and printed at low interest rates. The US went from a 6.0 overnight rate to a 1.0 rate. That is a massive drop and provided tremendous liquidity to be pumped into the markets of choice.
Oil, Gas, Gold, Copper, Dow, S&P, FTSE. The world was given enough money to fund its wars but also to fund infrastructure build up. Most of that happened through the housing market as that drop in rates meant US households could afford bigger and better homes. But it wasn't isolated as it was also done in Asia and Europe.
For the last few years the bond market has fought the Federal Reserve on rising rates because of the heavy investments tied into those markets by Asia Central Banks. As the Fed lifted rates from 1.0 to 3.75 the Yield Curve should have rose with it. But it didn't. Long term bonds saw a break outlook on the US market and refused to budge their position. This forced a flattened curve and is now in a position where the cost of a short term loan and a long term loan is no different. If you could borrow $100,000 at 2 years for 3.00% or get is at 30 years at 4.5% you would have to see which would provide the best financial sense. But what happens when the rates of both are at 4.0% or the 2y runs up to 5% while the 30 year sits at 4.5%. Well it causes a run on long term debt. The desire to put borrowed money out as far as possible easing monthly expenses.
All those ARMs that Greenspan was pumping about a year ago are now going to haunt the speculators who are still holding them when rates start to run up from continued Fed tightening because it means that monthly mortgage cost are going to go up and eat away the discretionary income of consumers.
If the typical consumer is sitting on a $300k mortgage with little equity then they could be paying $1,750 a month at 5.75% interest. Put it up to 6.25% and it raises monthly mortgage payments to 1,847. A $100 increase. For each .50% increase in rates you should expect to see a $100 incremental increase in the monthly cost of mortgages.
What this does is reduced the market for homes at that price range as new buyers are less likely to afford a home that size. Real Estate investors know that when you flip up houses working more expensive markets 300k-500k, 500k-1mil, 1mil-5mil you are meeting less liquidity as there are fewer people who can afford those prices the higher you go. It means that you may one day buy a house ot flip and realize that no one in the area can afford it and you are the final sucker who bought the highest.
As rates go up the buyer markets drops price brackets and looks for lower price levels. When they do this the people who have been flipping on ARMs or Interest Only loans do a mass exodus of their current holdings to protect their assessed value. This huge selling spree realizes lower buyer to seller ratio and soon the sellers start dropping prices to meet buyers.
The problem is when lower prices by sellers to entice buyers is coupled with the rising rates as buyers see no difference in monthly payments. The house price might drop from $300k to $275k but if rates at $300k were 5.0% then monthly payments were $1,610. When price dropped to $275k but rates went up to 6.0% monthly payments would be 1,650. The house costs the buyer more to borrow for. Sellers have to continue to entice buyers by dropping prices.
These sellers will have to choose between taking a loss on the property or holding it. Holding it will be difficult if it isn’t their primary home if the property is not rentable. Few single family homes on the market are rentable. Reason being is that you have to encourage a renter to pay you a premium over your mortgage on the property to break even. Multi-family homes and Duplexes are usually the best bet as they can bring in more that the cost of the mortgage.
I myself am looking with glee at the housing market. I have seen the prices drop considerably since 3 years ago. The liquidity is not very high here as I live near a smaller city in Massachusetts, and I’ve seen prices of some markets return to their 2002 levels. Some of the more robust metro areas that appeal to high technology or that get closer to Boston are maintaining higher prices and they most likely will hold up well as rising energy prices keeps people closer to city centers.
The recession is not coming from a single source. It is a trifold attack from Health Care rates passed on to the employee. Rising costs of energy from capped refinery output, and rising rates of interest on borrowed money. Each takes a piece of the consumers income while the price of oil may drop income growth from the drop in Oil will only be absorbed by rising health care or interest rates.
Market Data 
Markets 
AI
