Is the Next Peak-Oil Related Stock Market Crash Looming ?

With a sudden fall in oil price, yet another spike in price volatility careened through the markets last week, with more turmoil apparently building this week. Last week's price crash occurred even though key fundamentals were largely unchanged. Most commentators continue to harp on about the proximal causes of the current instability in oil price - failing to appreciate that the ultimate cause is likely to be the underlying reverberative and long-term effects of the unfolding Peak Oil process. At least these folk are consistent in their misapprehension of the operative cause and effect relationships.

The current bout of volatility is shaping up to be a doozy. As I discussed in my essay of 2018 (https://lnkd.in/gGG-NgnG), the recurring spikes in volatility that have marked oil markets for the last 20 years are associated with collapses in the stock market occurring in a subsequent 3-6 month timeframe. I have further observed, that the extent of these sudden drops in equity price tend to occur in proportion to the upstream level of volatility in the oil markets. Given the fierce, whipsaw behavior currently being exhibited by the global oil markets we can reasonably assume that the coming crash in stock prices is likely to be major - perhaps matching that seen in 2008.

As I reported in my 2018 Oil-Price.net article, I adjusted my modest retirement account to be out of the stock market in association with the last bout in energy market instability - dodging a major correction in the Dow in 2019. As of last weekend, I am again out of the stock market.