Wall Street bank raises US economy alarm

Wall Street bank raises US economy alarm

The United States will probably enter a recession if oil prices continue to soar and surpass $200 a barrel, Goldman Sachs chief economist Jan Hatzius said on Thursday.

“We estimate that it would take a sustained oil price increase to $200 per barrel to produce an income shock similar in magnitude to those that precipitated the 1974 and 1979 recessions – and this would significantly increase the 2022 recession odds,” Hatzius said in a note seen by Yahoo Finance.

The warning comes as top oil traders predict that prices could break the $200-a-barrel mark this year as a result of Western sanctions against Russia and the lack of alternative sources.

Moscow has warned of a price surge to $300 a barrel if the West abandons Russian oil. The Russian deputy prime minister and former energy minister, Alexander Novak, said that “some see it possibly reaching $500 a barrel.”

Prices for Brent crude have more than doubled compared to this time last year. They climbed as high as $139 a barrel at the start of the Russia-Ukraine conflict and the subsequent sanctions against Moscow. On Thursday, Brent was trading at $120 a barrel, while US WTI crude’s price stood at $114 per barrel.

Meanwhile, the national average price for gasoline in the United States hit historic highs after Washington banned Russian oil imports. The price is currently up 71.5 cents per gallon from a month ago and $1.37 per gallon higher than a year ago, according to GasBuddy.

The sharp rise has hit consumer confidence, raising concerns of a spending pullback which could lead the economy into a recession. President Joe Biden has claimed that Moscow is entirely to blame for surging US gasoline prices, conceding that he won’t be able to do much about runaway inflation at the pump.

For more stories on economy & finance visit RT's business section

Source: www.rt.com

The last notes - Экономика

most read news

#Экономика

The US has held ‘encouraging’ talks with India about a price cap on Russian oil that Washington wants to introduce in order to limit Moscow’s revenues and push down global crude prices, Reuters
подробнее...

The EU is planning to increase liquefied natural gas (LNG) imports from Nigeria amid concerns that supply from Russia may be cut, according to the deputy director general of the European Commission’s
подробнее...

France has announced a takeover bid to gain full control of the country’s largest energy utility, EDF.The government has made an offer of €9.7 billion ($9.9 billion) to nationalize electricity
подробнее...

The business climate has substantially worsened in Germany, with industries feeling increasingly concerned about the coming months, according to a survey by a German think tank released on Monday.
подробнее...

The Ukrainian government has moved to delay payments on foreign debt for two years, the country’s media reported on Wednesday. The restructuring will have to be approved by the creditors first, the
подробнее...

Twitter operated at a loss in the second quarter and suffered a decline in revenue from a year earlier, reflecting struggles that the company blamed partly on its pending sale to billionaire Elon
подробнее...

The Chinese currency the yuan outperformed the euro by trading volume on the Moscow Exchange (MOEX) for the first time on record, trading data from Friday shows.According to the data, the trading
подробнее...

Cargo shipments via Russia’s Northern Sea Route in the first half of this year were 5% higher than in the same period of 2021, Russian Deputy Prime Minister Alexander Novak said on Monday.“In 2021,
подробнее...

Ukraine’s state-run energy company Naftogaz has defaulted on its foreign debt, the firm announced on Tuesday.Naftogaz was unable to make payments on Eurobonds before a grace period expired, the
подробнее...

Russian energy major Gazprom will stop the operation of second Siemens turbine, the company announced on Monday. As a result supply through the Nord Stream 1 pipeline will not exceed 33 million cubic
подробнее...

The Russian Finance Ministry has announced a return to the public debt market by issuing a limited amount of OFZs, ruble-denominated sovereign bonds, in September, Deputy Finance Minister Timur
подробнее...

Russia’s military operation in Ukraine and the subsequent Western sanctions on Moscow might push the global economy into geopolitical fragmentation, the IMF warned in a report published on July 26.“A
подробнее...

Russia will resume natural gas deliveries via the Nord Stream 1 pipeline as scheduled, once annual maintenance work is completed on Thursday, Reuters has reported, citing its sources.The
подробнее...

The German government and energy major Uniper are reportedly nearing an agreement under which the state will inject more than €5 billion ($5.1bn) into the business. The total commitment is likely to
подробнее...

The EU has blocked a proposal to impose sanctions on Russian titanium producer VSMPO-AVISMA, the Wall Street Journal (WSJ) reported on Thursday.According to the report, the decision was made after
подробнее...

Germany may face shortages of such staples as toilet paper and cardboard if Russian gas supply dwindles in the coming months, German outlet Zeit Online reported on Wednesday.Operating paper plants may
подробнее...

EU energy ministers have agreed on an unprecedented plan that will see member states voluntarily slash their gas consumption by 15% from August until next spring. The deal does come with exemptions
подробнее...

China’s C919 narrow-body jet, the country’s first domestically designed commercial passenger aircraft, is nearing certification, having successfully passed test-flight tasks, state-owned manufacturer
подробнее...