Will stocks choke on oil?

The past five global recessions have all followed sharp jumps in the oil price. Right now the threat of higher oil is about the last thing equities need.

The past five global recessions have all followed sharp jumps in the oil price. While fears of a "spike and crash scenario", as Francisco Blanch of Bank of America Merrill Lynch puts it, receded early this week, global stocks soon slipped again. News of a sharp stock market slide in Saudi Arabia, prompted by fears that unrest could spread to this key oil producer, has sent Brent oil above $115 a barrel.

The hope is that immediate supply shortages won't be too bad and so the oil shock will prove temporary, says Gavyn Davies on FT.com. Saudi Arabia's pledge to replace lost Libyan output, along with the International Energy Agency's reminder that developed world inventories are high enough to replace a year's imports, helped fuel confidence.

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