Oil price swings won’t cause stocks to slide | Financial Times

Oil price swings won’t cause stocks to slide | Financial Times:

Depending who you ask about oil, you currently get one of two answers. Either mounting Middle Eastern tensions will soon send prices surging — wreaking havoc on the world economy. Or faltering global economic growth will crater oil prices. Either way, pundits posit that the global economy — and stocks — will suffer. No.

Oil prices may swing, but investors should expect little economic fallout. Here’s why I think oil has lost its famed economic power of yesteryear.

Wild oil price swings over the past 12 months caused confusion. Between mid-August and early October last year, Brent crude oil prices jumped 25.9 per cent as folks feared the US president Donald Trump’s Iran sanctions would squeeze supply. Pundits projected prices would keep climbing. Instead, they plunged -41.2 per cent through year-end, as the global stock market correction in the fourth quarter stoked recession and demand fears.