Economic security

Oil is the Most Likely Candidate to Rattle the US Economy

An acceptable oil price for the US is within the $40–$60 range, this is what its market seems to be expecting; however the chances are that prices could spike by more than this, dealing a blow to the US economy, according to Forbes contributor Brad McMillan.

A large part of the current recovery in the US is due to cheap oil, reads McMillan’s article for the magazine.

“Lower prices have allowed consumers to spend and save more, have pushed up business profit margins (outside the energy sector), and have generally improved every economy on the planet.”

The acceptable oil prices rang for the US economy is $40–$60, the analyst says, anything higher will have a detrimental effect on the economy.

“Right now, world oil production appears to exceed demand, but not by that much, perhaps in the 1- to 2-percent range, per the International Energy Agency,” the author says.

That excess, he explains, includes Saudi Arabia “pumping as fast as it can, other suppliers doing the same, and US production declining but still strong.”