Can the U.S. Economy Survive $100 Crude Oil?

Posted on by The INO.com Team

The big question is if crude oil is headed higher, how much of a price increase can the US economy afford and withstand?

Here is a raw commodity that is used by everyone and the US has no control over it. This key commodity to commerce just happens to be in areas that are hostile to the US. If we see a hiccup in the supply chain that changes this market dynamic, even for a short time period, we could see oil move back to the $100/barrel range in a heartbeat.

How will this affect the US equity markets? If crude oil heads back to the $95-$100 range, I expect that the economy will take a hit and that will send the major indices south. In this short video, which I made a few days ago, I share with you the potential target zones that we could see in the next 6 to 12 months in crude oil.

With the trend in crude oil in a positive trajectory, and the trend in the US equity markets also on a positive trajectory, something has to give. I expect the trend in these two markets to eventually decouple and go their separate ways.

As always, we will be monitoring our "Trade Triangles" for signs of weakness in the either the equity or crude oil markets.

We welcome your comments and feedback on this and all the posts we make on this blog.

Enjoy the video and all the best in trading,

Adam Hewison
President, INO.com
Co-founder, MarketClub.com

13 thoughts on “Can the U.S. Economy Survive $100 Crude Oil?”

  1. Jonathan,

    I believe everything is working on this and. So far you are the only person that has had problems with the video.

    Please try again.
    Adam

  2. FYI - there is a technical problem with the "Can the U.S. Economy survive $100 oil?" video. It sits at 2% indefinitely and never displays. Thanks.

    1. Louis,

      Thank you for your feedback.

      The blog is free however you may want to take a 30 day risk-free trial to MarketClub.com. Here you will find all the tools we use in the market including our talking charts technology, as well as our trade triangle technology. The 30 day trial comes with a money back guarantee.

      Here is the link you need for more information:
      https://secure.ino.com/products/marketclub/

      All the best,
      Adam

  4. We need to drll offshore and Alaska to help our country get back on track. We bring back Jobs, Money stays here, and (lower energy cost- ( gas,electricity ))= more cash flow in our economy. We have been decieved and are so blinded to the truth of this situation ,Yet so so so SIMPLE Solution!!!!! Start DRILLING NOW!!!
    We have 100 years supply of Natural Gas under our own countrys surface and we would not need to import any more oil !!
    Who are we waiting for??? The people who are in office now !!! Obama, Nancy Polesy, Harry Ried,---They are decieving the people of this country for their poltical reasons...
    We better wake up before it's too late !!!! TIME ( precious TIME ) is RUNNING OUT !!!
    WAKE UP WAKE UP OPEN UP YOUR EYES !!! DON'T LET POLITTICS BLIND US ANY MORE !!!

    1. Remember, oil is a globally traded commodity, as is gold. Demand for oil may fall in the USA, but China is diverting a chunk of its savings away from the U.S.dollar and into oil and metals to build infrastructure. As a resident of Alberta, Canada, where the heavy oil production is, I was shocked a few weeks ago to learn that Chinese interests have even bought a significant interest in a heavy oil project up here. Sorry guys, the USA no longer rules the world!

  5. Oil prices are affected by the deteriorating value of the US Dollar, underlying oil demand/supply and speculation.

    With US Government, and the FEDERAL Reserve, monetary and fiscal policies trashing the international value of the USD, there is no way that the price of oil in USD will fail to increase in its USD cost all other factors remaining the same.

    If a higher cost of oil in USD will have a very negative affect on the overall US economy (and it will), the US authorities should have considered this before they embarked on their damaging and inflationary spending, debt currency printing policies.

    An inflating cost of oil will increase the cost of all items in the US economy. The authorities were warned that their reckless policies would cause massive inflation. They could not care less about such consequences. The increasing cost of oil quoted and traded in USD is just one example of the broad inflationary development that has been created.

    Other commodities traded in the weak and deteriorating USD will suffer the same fate. Thus there is a general commodity cost inflation effect there also which will flow through to the rest of the US economy.

  6. If we tell the rest of the world we are going to drill offshore and Alaska, Oil prices drop. When we actually do it, Oil prices should drop drastically--- say 75 cents a gallon!!!!! What in the world are we waiting for??? The Problem is that we are blinded by our Gov't and the deception of their Biggest Tool( The MEDIA )

  7. I am an oil bull as far as investing goes! Oil has been king my whole life and my personal belief is that is not going to change in the foreseeable future! I will be buying oil and oil stocks on weakness from here to the end of the year to hedge against the higher prices!

    Can our economy survive 100 a barrel oil? No, not in its present state! It is my belief that even though many in the oil cartels don't care for us they do care for our money! If they trash the economy with high pricing then they are only shooting themselves in the foot! We will still be stronger than they are and I have little to no fear of this happening!

    I think oil needs to be in the $80.00 to $100.00 range to keep the flow coming, but we do not need that with the infant recovery occurring!

    My hope for the future is that oil will be high enough that it will encourage alternative forms of energy development! In order for AF development the work has to be profitable! So for the foreseeable future
    oil will still be a thorn in our side and if we play it correctly, money in our pockets!

  8. Our economy is too dependent on oil. To get to work, to get around, to import just about everything we use. The solution isn't just alternative fuels, but using less. Unfortunately our city planners of old chose suburban sprawl and dependency on cars.

  9. We got a brake out for oil after a ABCDE correction and now we go up for the first wave (Elliot).

    Debbie:
    Yes oil is going lower (second wave) for a short while and after that if my prediction still holds there is a nice buy moment to go long again (third wave)

    I hope it will because that would be a nice profit since 3rd waves are a bit longer then the 1st wave.

    So I will be waiting for the correction to go long again.

  11. I think oil is going to go lower, and so all these overpriced stocks that keep going up and up without any true economic fundamentals. But in the mean time, we gotta trade and make money with trailing stops to protect our profits.

    I want to take the time to thank Adam for his comments, charts and his great advise, while I'm not a member, I enjoy all of his videos and comments and have served me well. Thanks Adam.

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