08-03-2022 · 月次アウトルック

Surge in oil prices raises recession risk

There are mitigating effects at play as crude prices soar following Russia’s invasion of Ukraine.

    執筆者

  • Peter van der Welle - Strategist Sustainable Multi Asset Solutions

    Peter van der Welle

    Strategist Sustainable Multi Asset Solutions

Markets and consumers are likely to adopt a ‘we’ve seen it all before’ stance, with three reasons to remain optimistic that growth won’t be badly curtailed, says Strategist Peter van der Welle.

“The oil market was already tight prior to Russia’s invasion of Ukraine on 22 February,” he says. “With oil prices now exceeding USD 110 per barrel, reminiscences with previous oil shocks are strong. Oil prices even reached USD 140 per barrel before the Great Financial Crisis of 2008.”

“With the supply side relatively inelastic in the short term – especially in this era of transition towards a greener economy – it now seems that demand destruction should do the balancing act to lower prices. The possibility of forthcoming demand destruction has already started a growth scare.”

“Concerns are increasing that this oil price spike could usher in a near-term recession. Though higher real oil prices do directionally increase recession risks, there are several reasons to remain more sanguine on near-term recession risks stemming from a potential further rise in oil prices.”

Reasons to be sanguine

Van der Welle says a combination of declining global reliance on oil, the higher household wealth that was built up as spending was curtailed by Covid-19, and the correlation that oil price inflation has with the wider economy mean a serious slowdown is unlikely.

“The first point to make is that the energy intensity of oil production has been declining for decades, as well as energy usage as a percentage of GDP,” he says. “So, over time the susceptibility of the global economy to an oil shock has been declining.”

oil-prices-have-lost-their-power-to-cause-slowdowns-graph.jpg

Energy intensity measured as a proportion of GDP has been falling for decades. Source: Refinitiv, Datastream

“Second, besides the susceptibility to a shock, resilience to any such shock also needs to be factored into the equation. Looking at cyclical energy consumption as a percentage of disposable household income in the US, one observes that currently there is little aggregate demand destruction taking place, indicating that households are able to absorb high oil prices for now.”

クレジットに関する最新の「インサイト」を読む

Receive our Robeco newsletter and be the first to read the latest insights and build the greenest portfolio.

最新情報を受け取る

US leverage is low

“Oil prices seem to peak only at ‘peak rationing’: the point in the cycle when consumers have been forced to reduce their energy-related expenditures because high prices have started to bite. Currently, energy-related expenditures are slightly above their long-term trend.”

“Households therefore seem to have some wiggle room to weather even higher oil prices given that US household leverage dropped by 40% over the last decade while the ability to service household debt is high.”

“This allows for a larger share of their household income going towards energy spending that would otherwise have gone to debt and interest payments. Currently only 9% of household income goes to interest payments against a cyclical peak typically around 14%. This could leave US households a bit less sensitive to higher oil prices compared to historical averages.”

Relationship with GDP

Then there is the issue how higher oil prices initially correlate positively (and not negatively) with the real economy, Van der Welle says.

“Looking at the relationship between year-on-year oil prices and growth shows that GDP initially responds positively to higher oil prices for up to nine months, only to reverse its impact on a 9- to 24-month horizon,” he says. “As always in economics there are long and variable lags, and there is no difference this time.”

And one classic signal for an upcoming recession – the inversion of US yield curves – remains absent. Yield curve inversion occurs when it becomes cheaper to buy longer-dated bonds (such as 10 years) than shorted-dated debt (such as two years). It is a phenomenon that has signaled most recessions since WW2.

重要事項

当資料は情報提供を目的として、Robeco Institutional Asset Management B.V.が作成した英文資料、もしくはその英文資料をロベコ・ジャパン株式会社が翻訳したものです。資料中の個別の金融商品の売買の勧誘や推奨等を目的とするものではありません。記載された情報は十分信頼できるものであると考えておりますが、その正確性、完全性を保証するものではありません。意見や見通しはあくまで作成日における弊社の判断に基づくものであり、今後予告なしに変更されることがあります。運用状況、市場動向、意見等は、過去の一時点あるいは過去の一定期間についてのものであり、過去の実績は将来の運用成果を保証または示唆するものではありません。また、記載された投資方針・戦略等は全ての投資家の皆様に適合するとは限りません。当資料は法律、税務、会計面での助言の提供を意図するものではありません。 ご契約に際しては、必要に応じ専門家にご相談の上、最終的なご判断はお客様ご自身でなさるようお願い致します。 運用を行う資産の評価額は、組入有価証券等の価格、金融市場の相場や金利等の変動、及び組入有価証券の発行体の財務状況による信用力等の影響を受けて変動します。また、外貨建資産に投資する場合は為替変動の影響も受けます。運用によって生じた損益は、全て投資家の皆様に帰属します。したがって投資元本や一定の運用成果が保証されているものではなく、投資元本を上回る損失を被ることがあります。弊社が行う金融商品取引業に係る手数料または報酬は、締結される契約の種類や契約資産額により異なるため、当資料において記載せず別途ご提示させて頂く場合があります。具体的な手数料または報酬の金額・計算方法につきましては弊社担当者へお問合せください。 当資料及び記載されている情報、商品に関する権利は弊社に帰属します。したがって、弊社の書面による同意なくしてその全部もしくは一部を複製またはその他の方法で配布することはご遠慮ください。 商号等: ロベコ・ジャパン株式会社  金融商品取引業者 関東財務局長(金商)第2780号 加入協会: 一般社団法人 日本投資顧問業協会