Oil could find a floor as soon as the world economy does.
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For the last 75 years, almost every economic crisis has been preceded by an oil price spike. The worry now is that low energy prices are pushing the global economy into a tailspin. Apple Inc., for example, blamed weaker sales last quarter on lower economic growth in some oil-rich countries.The problem is that the world's economy relies far more today on emerging countries than 15 or 25 years ago – the last periods of ultralow oil prices.And with the exception of China and India, most big emerging countries are oil and commodities rich. Such economies now account for about 40 percent of global gross domestic product, about double their share in 1990, according to the International Monetary Fund.To be sure, oil could find a floor as soon as the world economy does.Low oil prices have prompted companies to cancel dozens of capital-intensive projects – like drilling wells – which in turn means lower demand for machinery.
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