AN EXPENSIVE OIL WOULD BE A BLOW TO THE US ECONOMY

AN EXPENSIVE OIL WOULD BE A BLOW TO THE US ECONOMY

The rise of price of oil could be much larger than expected. In this case, it would become a serious threat to the US economy.

The increase in the barrel price could carry a heavy blow to the economy of the United States. Given the growth of prices of the black gold, the balance between supply and demand is likely to return soon to normal. In this case, prices should stabilize between 40 and 60 dollars, the cost of a barrel.

However, some factors may prevent this scenario to occur, as many situations where the US oil market may not have time to adapt to the growing demand. This could be the case if the OPEC countries finally manage to find a compromise or if the United States reduced their oil production faster than expected.

To date, the production of oil exceeds the demand only one or two percent. In this context, if demand continues to climb and some countries cut the production slightly, the surplus will disappear.

Therefore, the oil price should rise and in this case, the United States will be deprived of all the benefits offered by a cheap oil.