(In thinking about the economic importance of oil, it is the contribution of oil to economic output that is relevant — hence the indices of oil to GDP. Oil revenues are spent, not savedAnother reason an oil price rise matters less today is that oil producers have learnt to spend money. Total global demand should not fall with an oil price rise. For a country such as the US, where petrol is not taxed very heavily, the link between crude oil prices and consumer oil prices is strong. In the unlikely event that oil prices do remain high, investors should watch ­wages a little more carefully.

Source: The Edge Markets February 07, 2020 03:33 UTC