Oil prices downtrend is negative for global economy
BuffaloReport (Minks) – G5 economies benefit from the Oil prices downtrend. However, their global impact is negative.
Commodities market still shows no sign of recovery, as Copper prices have joined the downtrend and have lost 25% of their last year value. Some experts think that this will boost the G5 economies growth. However, it is bad for the global recovery.
The pressure on commodities is still very high due to the latest World Bank’s forecasts on the global growth. The oversupply of Oil markets may be explained by weak recovery in the world’s biggest economies.
On the other side, there is OPEC with its unwillingness to cut oil extraction because of competition with US Oil market newcomers. Despite a very slow recovery in EU and Asian countries, OPEC is still deaf to the new challenges. In such situation, most of US Oil companies may have difficulties as the breakeven price for them is around 65$ per Brent barrel.