So.... you start a thread to thank Trump single handily reducing crude prices.... but a month later you are now thanking Trump for raising prices? This thread will age well, thanking Trump for all the oil swings.
He told Putin and the Saudis to put the floor in so American producers don’t lose jobs and profits. Trump understands balance like Thanos.
Being both a consumer and producer, I like your style. Prices go down? Yay Trump! This is amazing for the consumers. Prices go up? Yay Trump! This is amazing for the industry.
The oil market may reflect a slow down in the economy which would drive prices lower through less demand The counter argument to that is the unemployment rate is very low.
Oil is a leading indicator, employment is not (it's actually a lagging indicator). You are arguing that because employment is low, that the economy is not causing oil prices to drop is spurious logic then. The fact is that the stock market IS a leading indicator which has been on a significant bear trend because of fears the economic run is over, as such oil is taking a big hit as it is a futures market.
The stock market is the first lagging indicator. If it was a leading indicator, we'd all be millionaires. You are stating a cooling off period is really a bear trend. The stock market is not in a bear trend. Its in a cooling off. Yes, we are likely entering a bear market.
I understand what you are saying and not arguing with the overall premise that unemployment is about where the economy is and markets are about the future. However to be more clear the price of oil has been falling fpr two months and unemployment still remains low. The bigger issue im pointing out is the oil market is different. Its not as much of a leading indicator because supplies aren't as tight as they were 20 years ago. Edit: no one has to get a jump on oil anticipating tight supplies because if the price goes up drilling will go up and the price wont keep going up because fracking isn't expensive What happened to the price of oil recently isn't less demand. The price went up and drilling is cheap. So producers all over the world tried to take advantage and supply has caught up
It's not CURRENT demand that determines the price of oil - it's FUTURE demand which is an expectations based on the economy. The increase supple does bring the price of oil down, but the slide we are seeing is also because the expectation is the US and global economy has past its peak and will soon decline. Unemployment isn't a current indicator, it's a lagging indicator. That means that the unemployment rate won't go up until AFTER the economy has been in a period of decline. So a current low unemployment rate speaks to the health of the economy 6 months ago, not today. The leading indicator are things like oil prices, the stock market, retail sales, corporate profits. Oil prices and the stock market have slipped substantially and retail sales are expected to slip in Q1 of 2019. We're going to get another interest rate hike to keep inflation in check (thanks to the tax cut that is driving up interest rates further) and this in turn will start to slow economic growth. Currently there is now a 20% chance of a recession in the next 12 months...it wasn't that long ago it was under 10%.
It's a leading indicator - not sure where you are getting it is a lagging indicator. In nearly every recession the market preceded the decline and same for every boom. And we are not in a cooling down period, we are in a bear market which is defined as a 20% drop which has now occurred. We've entered a bear market. It could bounce back but given the rising interest rates and global economic weakness that is being seen, this is likely to be the first signs of a recession in the next year or two. We'll also be in trouble because Trump and Congress won't be able to do much fiscal stimulus given that Republicans decided to run massive deficits during a boom. The stupidity will come to bear out.
Oil prices didnt just start falling. This thread is already a month old. They have been falling for two months Secondly it was the increase in oil during the summer that was only a temporary blip. The oil price change has been more about supply than demand
Oil prices began their decline right after the stock market did in late Sept. The drop is the expectation of lower demand due to economic reports
