Crude oil prices have risen by almost 70 per cent in the past 11 months, eating into consumer spending – but a recession prompted by an oil ‘shock’ is still some way off, says Aberdeen Standard Investments.
In its global overview briefing released last week, Aberdeen Standard Investments said the rising oil price is panning out to be more of a 'blip' than a 'shock'.
Crude prices have increased by 12 per cent since the start of January 2018 and almost 70 per cent since the end of June 2017, said the report.
Ominously, rapid spikes in the proportion of personal disposable income devoted to spending on petrol and other energy goods have played a causal role in "four of the past six US recessions", said Aberdeen Standard Investments.
However, the positive effects of higher oil prices on energy investment should provide some offset to the fall in consumption, said the note.
On the positive side, Aberdeen Standard Investments noted the current spike in oil prices is 'not at danger levels yet', referring to the graph below.
But the note said there is no room for complacency.
"History is littered with examples of oil shocks that were not expected by the commodity forecasting community," it said.
Challenger has downgraded its forecast for 1H19, now expecting its statutory net profit after tax to plummet by 97 per cent from the year be...
Saxo Bank has warned that Australia’s luck may be running out as China’s economic slowdown adds to a growing list of challenges for the ...
Finance job opportunities have experienced a double digit drop in the wake of the royal commission as employment demand and career opportuni...