{"id":11921,"date":"2022-09-08T14:43:09","date_gmt":"2022-09-08T14:43:09","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=11921"},"modified":"2022-09-08T14:43:10","modified_gmt":"2022-09-08T14:43:10","slug":"do-sliding-oil-prices-signal-a-recession","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/do-sliding-oil-prices-signal-a-recession\/","title":{"rendered":"Do Sliding Oil Prices Signal a Recession?"},"content":{"rendered":"\n<p><em>Bryan W. from Columbia, S.C. asks: <\/em>Hello Mitch, I\u2019ve noticed that oil prices have been locked in a downtrend for some time now. That\u2019s great for gas prices and energy costs in general, but is it also a sign that global demand is falling off a cliff? Which, I would take to mean the economy is headed in the same direction?<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>Thanks for sending your question! You are on target when it comes to oil prices \u2013 as I write, a barrel of crude is off about -25% from March highs, and as the chart below shows, it\u2019s been in a pretty steady slide.<sup>1<\/sup><\/p>\n\n\n\n<p><strong>Price of a Barrel of Brent Crude<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"395\" src=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/09\/pic1-1024x395.png\" alt=\"\" class=\"wp-image-11922\" srcset=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/09\/pic1-1024x395.png 1024w, https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/09\/pic1-300x116.png 300w, https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/09\/pic1-768x296.png 768w, https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/09\/pic1.png 1168w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption><strong><em>Source: Federal Reserve Bank of St. Louis<sup>2<\/sup><\/em><\/strong><\/figcaption><\/figure>\n\n\n\n<p><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2022_09_08&amp;content=volatility_can_be_good_guide\"><strong><u>How to Use Market Volatility to Your Advantage<\/u><\/strong><br><\/a>\u00a0<br>Sudden ups and downs of the market can be very challenging to manage. What happens to your investments when the market drastically declines?<\/p>\n\n\n\n<p>Turbulence in the market is normal, but it\u2019s important that investors are aware of the positive aspects of volatility. If you have $500,000 or more to invest, get our free guide, <em>\u201cUsing Market Volatility to Your Advantage,\u201d<\/em> and learn our insights, based on decades of experience, about how a volatile market may be able to help investors refine their strategies and potentially generate solid returns over time.<br>&nbsp;<br>You\u2019ll get our ideas on:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>How market volatility can \u201cshake up\u201d complacent investors<\/li><li>Potential bargains that may be uncovered through turbulence<\/li><li>Why volatility may help prevent overheating and market \u201cbubbles\u201d<\/li><li>What history shows us about opportunities for steady investors in turbulent markets<\/li><li>Plus, more ways you may be able to benefit from a volatile market<\/li><\/ul>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2022_09_08&amp;content=volatility_can_be_good_guide\">Download Our Guide, \u201cUsing Market Volatility to Your Advantage\u201d<sup>3<\/sup><\/a><\/u><\/strong><\/p>\n\n\n\n<p>Gasoline prices have also followed suit, which as you mentioned is a relief not only to consumers but also to inflationary pressures. Gas, food, and housing\/rent prices have all been fairly significant contributors to rising prices, so the softening there has been welcomed.<\/p>\n\n\n\n<p>I agree with you to a certain degree that falling commodity demand \u2013 tied to reduced global growth expectations \u2013 is playing a role here. We know the U.S. and Europe experienced weak growth in the first half, and China\u2019s ongoing Covid-19 restrictions and trouble in the property market have dented growth prospects there as well. Expectations for the full year 2023 GDP growth in China keep scaling down, all of which implies less demand for oil and other commodities needed to fuel growth.<\/p>\n\n\n\n<p>What I would add though is that supply is also playing a key role in shifting oil prices. The initial shock from the war threw Russia into question as a top producer, and sanctions from the U.S. and Europe also threw the supply-demand equation out of balance. But since then, Russian oil has started to flow elsewhere, mainly in Southeast Asia and China, and higher prices have also spurred some additional production in the U.S. and elsewhere. Oil markets are global and market-based, and I think the supply shock from the war has started to balance itself out again.<\/p>\n\n\n\n<p>To make the most out of turbulent times in the market, I recommend that investors use market volatility to their advantage. I am offering all readers our guide, \u201c<em><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2022_09_08&amp;content=volatility_can_be_good_guide\"><strong>Using Market Volatility to Your Advantage<\/strong><\/a><\/em>.\u201d<sup>4<\/sup> This guide will help you learn our insights, based on decades of experience, about how a volatile market may be able to help investors refine their strategies and potentially generate solid returns over time.<br>\u00a0<br>You\u2019ll get our ideas on:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>How market volatility can \u201cshake up\u201d complacent investors<\/li><li>Potential bargains that may be uncovered through turbulence<\/li><li>Why volatility may help prevent overheating and market \u201cbubbles\u201d<\/li><li>What history shows us about opportunities for steady investors in turbulent markets<\/li><li>Plus, more ways you may be able to benefit from a volatile market<\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, download this free guide today by clicking on the link below.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Oil has come down nearly 25% since its peak in March, and gas prices are falling too. Mitch looks at what&#8217;s behind the decline, and what&#8217;s ahead for the economy. <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-11921","post","type-post","status-publish","format-standard","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11921","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=11921"}],"version-history":[{"count":2,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11921\/revisions"}],"predecessor-version":[{"id":11924,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11921\/revisions\/11924"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=11921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=11921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=11921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}