Running on empty
The oil price has been extremely volatile over the past five years.
People were talking about oil reaching US$150 per barrel in 2014…only to see it dive to below US$30 less than 12 months later.
With oil back in the mid-US$50s range and the Aussie dollar weakening, the oil price is barely tolerable for us now.
However, as Jim explains today, there are three key events that will impact the oil price. And, if geopolitical tensions increase, the oil price may be set to climb even higher.
While Jim lays out the ‘big picture’ for crude today, let’s not forget about the effect this will have locally.
Higher oil prices in Aussie dollars will be an even bigger strain on Aussie consumers. What other spending will they forgo in order to put petrol in the car?
As I explained yesterday, consumption is already falling. Further interest rate cuts are unlikely to slow the rate of people falling behind on their mortgages. And more to the point, decisions made by the Reserve Bank of Australia, along with our slowing economic growth, are driving the Aussie dollar lower.
Aussies need to come up with a plan to survive the tough times ahead.
Now, it’s over to Jim for his analysis.
Until next time,