(Bloomberg Opinion) -- Oil’s popularity isn’t what it used to be.
It’s not just a looming global trade war. As I’ve written, not only will tariffs and retaliatory measures stifle the activity that normally stokes consumption, they’ll squeeze economies everywhere. That’s a good way to stifle demand.
But that’s not the only problem the market faces.
Recovering oil prices and weaker emerging-market currencies have combined to hit consumers’ pockets. The result could be a significant slowdown in the very countries expected to be the powerhouses of global growth. And this adds up to another reason for thinking growth in demand for oil is set to cool.
Although dollar-denominated crude prices are currently around 40 percent below their level just before the 2014 price crash, the same is not true of retail gasoline or diesel prices, not even in the U.S.
American average premium gasoline prices peaked in June 2014 at a little over $4 a gallon before sliding below $2.50 in early 2015 and as low as $2.20 a year later. But since then they have staged a steady recovery, coming within a whisker of $3.50 in the run-up to this summer’s driving season. |