Brent crude oil prices are 0.8% lower on the day with a barrel going for $114.92.
WTI crude oil prices are 0.71% lower at $103 a barrel.
This morning The Economy News reported that high oil prices could lead to a global recession.
Now, a new report from Deutsche Bank this morning also warns on the prospect of recession.
"While we remain very much of the view that global growth will remain a priority for government authorities over the course of the year, the recent increase in oil prices has threatened this objective.
"Indeed, spikes in oil prices have often been followed by periods of weak or recessionary economic activity.
"According to DB economists, a USD10/bbl increase in oil prices (to USD110/bbl) would lower global GDP by about 0.4% (taking our global GDP forecast from the current estimate of 4.3% to 3.9% YoY).
"If, however, oil prices were to rise USD50/bbl (to USD150/bbl), such a shock would negatively impact global growth by 2.0% (this implies a linear relationship between oil pricing and global growth of -0.4% with each USD10/bbl increase)
Despite the dangers of inflation, which are being caused by strong synchronous global growth and increasingly problematic supply response (impacting a growing range of commodities), Deutsche Bank expect that government authorities will do their utmost to support economic activity.
The research note goes on to say:
"We view low growth as a potential threat to the financial system in the West (given high debt levels) and to social stability in the Emerging World. As a consequence, and despite the risks that high energy prices represent, we believe that growth over the next 12 months will remain supported by government policy."
Source: The economy news
www.economy-news.co.uk
WTI crude oil prices are 0.71% lower at $103 a barrel.
This morning The Economy News reported that high oil prices could lead to a global recession.
Now, a new report from Deutsche Bank this morning also warns on the prospect of recession.
"While we remain very much of the view that global growth will remain a priority for government authorities over the course of the year, the recent increase in oil prices has threatened this objective.
"Indeed, spikes in oil prices have often been followed by periods of weak or recessionary economic activity.
"According to DB economists, a USD10/bbl increase in oil prices (to USD110/bbl) would lower global GDP by about 0.4% (taking our global GDP forecast from the current estimate of 4.3% to 3.9% YoY).
"If, however, oil prices were to rise USD50/bbl (to USD150/bbl), such a shock would negatively impact global growth by 2.0% (this implies a linear relationship between oil pricing and global growth of -0.4% with each USD10/bbl increase)
Despite the dangers of inflation, which are being caused by strong synchronous global growth and increasingly problematic supply response (impacting a growing range of commodities), Deutsche Bank expect that government authorities will do their utmost to support economic activity.
The research note goes on to say:
"We view low growth as a potential threat to the financial system in the West (given high debt levels) and to social stability in the Emerging World. As a consequence, and despite the risks that high energy prices represent, we believe that growth over the next 12 months will remain supported by government policy."
Source: The economy news
www.economy-news.co.uk
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