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Energy shock threshold
WTI crude above $100 represents an energy price shock that functions as a tax on consumers and businesses. Historically associated with recession risk (1990, 2008) though not deterministically (2011-2014 saw $100+ oil with continued growth).
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
Of the four times oil exceeded $100 (2008, 2011-2014, 2022), recession followed in one case (2008). The key differentiator is whether the spike is supply-driven (bearish) or demand-driven (less bearish).
The energy sector has returned +40-60% in the 12 months following oil crossing $100. This is the clearest sector rotation signal in commodity-driven environments.
Higher gasoline prices reduce disposable income. Consumer discretionary stocks underperform by 5-10% relative to the market during sustained $100+ oil periods.
Sustained triple-digit oil is a reason to audit sector tilts: a heavy consumer-discretionary bet with no energy exposure has historically been the painful combination, so review whether your sector mix can tolerate a prolonged fuel-cost squeeze.