Posted By RichC on December 15, 2014
Wow! … I’ve watched oil continuing to dip lower on Monday afternoon (WTI $55.40/barrel) and this rapid drop in recent weeks has “for some reason” caused equities to sell off. Normally one would see lower oil prices as a good thing for the stock market since it makes goods and products less expensive and gives everyone a few more dollars in their pockets. The slide in the stock market hard to figure IF we are to believe it is tied to oil.
The only conclusion I can make is that oil priced in the mid-50s indicates weak worldwide demand and therefore slower economic growth. On the other hand, if you can pick the bottom for oil ($40ish per barrel?) … there’s a lot of money to be made in the future.