The World Economic Forum’s annual Davos gathering is occurring this week and once again your beloved author’s invitation seems to have been lost in the mail. Hurt feelings aside, we think it’s a nice time to think about how the health of the global economy could look in 2019 and the impact that it may have on oil prices.
The normal newswires and business periodicals have all penned stories over the past two weeks describing the mood at the forthcoming event as somber. Take for example a few choice excerpts from a Bloomberg story which ran on Friday-
Those still going will do so as their economies lose momentum just a year since they enjoyed a rare synchronized upturn. While few predict a recession, companies are the most bearish since 2016 as economic data falls short of expectations and political risks mount amid an international trade war, U.S. government shutdown and Brexit. “The mood is going to be much darker than a year ago,” said Nariman Behravesh, IHS Markit’s chief economist…. A recession isn’t imminent, but as economies slow it wouldn’t take much to topple growth.” “The evidence is consistent with a slowdown rather than slump, but downside risks have increased,” said Tom Orlik, chief economist at Bloomberg Economics.
Ouch! This passage does a good job of encapsulating the attitude towards the global economy which is increasingly negative and worsening due to the nonstop flow…