Oil prices sing the recession blues
Oil drilling rigs in Midland County, Texas.
Kai Ryssdal: One nice thing about a worldwide recession? It usually leads to lower gas prices. Crude oil hit $75 a barrel today. Closed a little bit above that.
Also today, both OPEC and the U.S. Energy Department lowered their predictions for oil demand for the rest of the year. From the Marketplace Sustainability Desk, Eve Troeh reports.
Eve Troeh: Oil trades in its own little world. Things that sway the rest of the stock market -- inflation, value of the dollar -- eh, not my problem, says Big Oil.
But right now, oil's glued to the gossip, like everyone else.
Jim Burkhard: The price of oil is caught up in the same drama that we're seeing in the global financial markets.
Jim Burkhard follows global oil for Cambridge Energy. He says this news is big enough that everyone sways.
Burkhard: The stock market is reacting to concerns about the future course of global economic growth. And the pace of economic growth is the single most important variable that shapes global oil demand.
A global recession means everyone uses less oil, even the big developing economies. They're still growing, just not skyrocketing.
Burkhard: We're likely to see Chinese demand growth come in quite a bit weaker this year than last. That would certainly have an impact on oil prices and could drive them lower.
Until the global outlook's clearer, Burkhard says oil and stock prices will ride the same rollercoaster. In the meantime, here's a silver lining for those of us on the ground:
Carl Larry: We will see gasoline prices come down, because of the lower oil prices.
Carl Larry's with Blue Ocean Brokerage. Gas prices already rolled back after yesterday's oil drop. But he says this isn't 2008, when gas went from $4 a gallon to less than $2. Barrel prices for oil aren't likely to stay down long-term.
Larry: It's very possible we'll get back to $100 by the end of the year.
Because, he says, the oil markets already adapted to a sluggish economy the past few years. They simply don't have as far to fall this time around.
I'm Eve Troeh for Marketplace.