Oil prices likely to spark a recession, then take a dip

Oil has pushed over $50 a barrel again. Adjusted for inflation, oil has come within range of petroleum crisis trading during the ’70s and ’80s, notes Thomas Keane of Bloomberg News.

If these prices are maintained, history suggests the result will be recession accompanied by a falloff in prices. In the 1970s, crude oil prices quadrupled, followed quickly by a recession. They then fell slightly in real dollars before more than doubling. In 1980, with oil over $30 a barrel, lots of voices were saying it was headed for $100.

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