A Gusher? 10.16.00

Rising oil prices have triggered fears of an impending recession. So much so that President Clinton tapped oil reserved for national emergencies. Experts don't expect prices to get much past $40. But what if prices do keep rising?

--Michael Freedman

$100

At this price, long gas lines would be the good news. "This would be the flame that starts inflation," suggests Philip Flynn of Alaron Trading, a futures brokerage. "Actually, the house would be burning down."

$85

Adjusted for inflation, oil hit this price in the late 1970s. Environmentalists would lose out, as the government would likely open federal land and wildlife preserves to drilling, says economist James Williams.

$60

At this level, says J.P.Morgan economist Robert Mellman, consumer spending could drop 2%, likely causing layoffs and recession. That could be when Alan Greenspan tinkers with the money supply.

$50

Inflation-adjusted oil prices hit this mark during the Gulf war. This time consumers will feel the pinch, perhaps paying a surcharge for taxi rides and airline tickets. Time to trade in that Expedition for a Honda.

$40

If oil prices stay here, stocks like Conoco and Occidental could double, suggests Jay Wilson, a J.P.Morgan analyst. An elected Dick Cheney might wish he'd held on to his Halliburton stock options.

http://www.forbes.com/global/2000/1016/0321025b_2.html

-- Martin Thompson (mthom1927@aol.com), October 17, 2000