Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.
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.
Chart du Jour: Oil price spikes in perspective was first posted on July 10, 2011 at 6:10 am.
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