The global economy is once again showing some worrying signs of a slowdown, opening up a major downside risk to oil prices.
Global trade volumes are declining for the first time since the end of the 2008-2009 financial crisis, according to Reuters. Between December and February trade volumes contracted by 0.8 percent compared to the same period a year earlier. John Kemp of Reuters says the global economy is “one more shock away from recession,” pointing to a series of worrying indicators, including a contraction in cargoes at Hong Kong’s International Airport (the world’s busiest air cargo hub), falling volumes of shipping containers through the U.S. Port of Long Beach, and declining freight rail shipments in the U.S.
The metrics are jarring and stand in sharp contrast to the new record high reached in the S&P 500 in recent days.
There are other cracks that are beginning to become more visible. For instance, the sales of farm equipment in the U.S. are plunging, as American farmers are facing multiple headwinds from Trump’s trade war, falling crop prices and severe weather. Farm profits fell to $69.4 billion in 2018, about half of the $136.1 billion in 2013, according to Bloomberg. “The retaliatory tariffs that China has levied on almost all U.S. agricultural exports has seriously hurt farmers, further depressed already stressed commodity prices, and has had a chilling effect on equipment manufacturers,” Kip Eideberg,…