Monday, September 5, 2011
Graph above is the daily Brent price (from the EIA) from Jan 2009 to August 31st, with today's number added from new stories. Since the Libya-inspired peak in April we seem to have been in a volatile-but-generally-down trend associated with weak global macroeconomic news and particularly uncertainty about the Eurozone.
The question now is whether the global economy will firm up a little bit in the second half or continue to worsen. A significant part of that will be down to government policy, and in particular whether the recent trend to fiscal austerity and monetary dithering will change in the face of weak economic growth.
Still, oil over a $100 a barrel is hardly cheap by historical standards and suggests the limits of how much economic growth the global economy can sustain at the present without triggering resource price shocks - not too much.