Oil Stock Market

Paper Summary:

This paper reflects on the relationships between oil prices and the stock market. The relationship between oil prices and increases in costs to transportation, heating, and production are reviewed, and the role of spiking oil prices on market uncertainty is discussed. Overall, higher oil prices are historically linked to declining stock market prices, and it seems reasonable to suggest that future stock market decreases will come from current increases in oil prices.

Outline
Abstract
Introduction
Oil Prices and the Stock Market
Conclusion

From the Paper:

"The relationship between rising oil prices and falling stocks has been seen repeatedly throughout the past thirty years. Form 1973 to 1982 when oil prices rose from $5 to $30 USD a barrel also saw double digit inflation, and two recessions. The same pattern was seen in 1987, when rising oil prices saw stocks tumble by more than 30 percent on the Dow Jones Industrial Average. Stocks fell again when Saddam Hussein invaded Kuwait, and oil prices rose close to 50 percent over several weeks. From 1991 to 2000, stocks remained strong as oil prices held steady (Leeb and Leeb, 2004)."

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