What Would $120 Oil Mean for the Economy?

Saturday, 15 April 2006

Keybridge Research conducts a summary analysis of the economic effects of high oil prices

The past few months have seen the price of oil hovering around $60 to $70 per barrel.  High prices are starting to exert downward pressure on real disposable income growth and negatively affect the U.S. trade balance: in 2005, real disposable income grew by only 0.4%, as compared to 4.1% in 2004, and oil and petroleum products accounted for nearly one-third of the U.S. trade deficit in 2005.  This economic landscape provides the starting point for Keybridge president Dr. Robert Wescott's brief analytical overview, conducted for Securing America's Future Energy (SAFE), of the negative effects on the world economy and financial markets if oil were to hit $120 per barrel.



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