Does oil's slide forebode a global slowdown?

clock • 2 min read

Lower oil prices have been hailed as a welcome boost to the global economy, but could they also be a harbinger of declining demand in the global economy? Woodford IM's Stephen Lamacraft explains.

Since oil prices have halved in the last few months from peaks of over $100 a barrel, investors may be wondering how low oil prices will fall and how long they will remain depressed. The US shale revolution has been a key factor in oil markets. When the price of Brent crude was above $100 per barrel, as it has been for much of the period since 2011, it made sense for US producers to pump out as much as they could. However, it is estimated that a third of US shale is un-economic to produce below $80 per barrel, and the further oil falls, the less viable much of this industry has become...

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