We sometimes forget that the U.S. economy is a quarter of all world demand for oil, so if it slows down it should take some of the froth off the demand side.

oil prices have become certainly a threat to the world economy.

Oil prices have certainly become a threat for the world economy.

World oil prices jumped again this week as the price of crude oil traded above $63 per barrel. Seasonal maintenance being performed at gasoline refineries will temporarily limit gasoline production. The near future will probably continue to show lots of ups and downs, and traders react to news of almost any sort.

It seems more likely now that the current slowdown in the world economy will worsen. In these circumstances, New Zealand's short-term economic outlook would be adversely affected, although any downturn might well be relatively short-lived.

In the big oil shocks that really damaged the economy, the tax on the consumer was many times more than that, but that alone wasn't enough. You also had to have people worrying that prices were going higher forever.