When the price of oil jumped 15% in a single weekend last month, some analysts started using the term “economic shock.” What does that mean, and how is it relevant to investors now? The recent price move is reminiscent of the 1970s oil shocks when OPEC imposed an oil embargo, cutting global supplies. “The damage done from those [1970s] oil shocks was massively greater than [it] would be today,” says Mr. Ranson. However, not all economies will be unaffected by the jump in energy prices. The good news is that these sorts of shocks tend to be self-healing, over time.

Source: Wall Street Journal October 07, 2019 02:03 UTC