Economic Slowdown: Oil & Natural Gas Prices Continue To Fall


I’ve been noticing that gas prices have been steadily falling for weeks now. So far oil and natural gas prices have fallen. It’s good news for consumers, but is it good news for the economy?

Market Stream reports that this is largely due to a decline in growth in China.

Oil prices fell 2% last week, during which they were “weighed by a weak oil-demand outlook after China’s disappointing [manufacturing index] reading … sparked concerns of slowing growth in the world’s second-largest fuel consumer,” ICICI analysts led by Pooja Sriram said on Friday.

Trending: Trump Posts Kind Tweet About Elijah Cummings, But Still Gets Attacked

China’s manufacturing activity swung to a contraction in May after months of slowing growth, according to preliminary survey results from HSBC on Thursday. The “flash” version of its Purchasing Managers’ Index for May fell to a seven-month low of 49.6, down from April’s final reading of 50.4. A result below 50 signals contraction.

take our poll - story continues below

Has Adam Schiff committed fraud and treason concerning the Trump probe?

  • Has Adam Schiff committed fraud and treason concerning the Trump probe?  

  • This field is for validation purposes and should be left unchanged.
Completing this poll grants you access to Freedom Outpost updates free of charge. You may opt out at anytime. You also agree to this site's Privacy Policy and Terms of Use.

Signs of weaker domestic and external demand in China added to concerns among investors about already-high inventories of U.S. crude oil. Last week, the U.S. Energy Information Administration said supply of the commodity fell much less than expected.

Dr. Gary North says that the energy sector is a “good proxy” for the international economy. However, he warns that falling energy prices indicate a slowdown in the world economy.

“Oil is the single most important international commodity,” writes North. “The world consumes a billion barrels every 12 days. It is the foundation of the world’s economy. There are few oil reserves. So, at the margin, the price of oil is determined mainly by demand. The supply does not change week to week. Producers are maxed out, or close to it, at all times. So, a decline in price reflects falling demand, which in turn represents economic slowdown.”

While I’m happy to see gasoline prices begin a downward trend, I’m skeptical about the future of the economy in the United States and abroad.

Don't forget to Like Freedom Outpost on Facebook and Twitter, and follow our friends at RepublicanLegion.com.

You Might Like
Previous SC Rep Blasts Hillary On Benghazi: “You Can’t Lie To Congress Whether You’re Sworn In Or Not”
Next Marine Veteran Blasts Anti-Troop Rhetoric In Alternative Media

Join the conversation!

We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the ∨ icon to the right of the comment, and report it as spam. Thank you for partnering with us to maintain fruitful conversation.