Week of December 21, 2015
- WTI fell below $35/bbl and Brent traded below $37/bbl last week as supply continues to outstrip demand.
- Prices are the lowest in six years and a far cry from highs of $145/bbl 7 years ago
- The Dow-Jones fell 2.1% (worst two-day slide since August) largely based on the continuing slump in oil prices.
- Investors are worried about what the weakness may say about the global economy
- Once adjusted for current oil prices, inflation numbers will fall back to levels not seen since before WW2 across the G7 nations this year.
- The past 12 months will mark the first year since 1932 that inflation has fallen below 2% in every economy in the G7, reflecting the drag brought on by the slump in commodity prices.
- IHS expects increasing demand and lower US production will balance the market by mid-2016.