quities are reacting negatively on higher oil prices, after a long period the opposite happened. This is caused by the market seeing higher risks when oil prices rise above certain levels (+50% in six months is often mentioned as trigger for bad times) and triggering lower growth. Until recently higher oil prices were seen as sign that economic growth was accelerating.
That view is confirmed by Dr. Copper. The copper prices were rising very closely in line with the oil prices until recently. The last weeks you see clearly falling copper prices and higher oil prices (see chart FT): the higher oil prices will cause lower economic growth, so demand for copper will go down as the market is now discounting in the oil prices.
Dr. Copper gives more attention to China and other Emerging Markets than to the US/Europe, so Dr. Copper is saying economic growth will be a bit lower in China/ Emerging Markets than previously thought (e.g. China not growing 10%+ but 8-9%)).
The market is not seeing the rise of the oil prices as permanent. Backwardation has returned in the oil prices, discounting somewhat lower prices after a short period from now.
The share prices of global energy are suddenly breaking down despite the high oil prices, meaning the oil price is not seen to go up from current levels because it will trigger lower economic growth.
The stock markets in the Middle East are in recovery mode, signalling that they fear a lot less potential contagion from the Jasmine Revolution to Saudi Arabia/ severe oil production disruptions.
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