Talking point - The price of oil and its effect on credit
The devastation wrought by Hurricane Katrina has pushed oil prices to highs of nearly $70/bbl. Credit asks market participants what impact this spike in prices has had on the credit market
Gary Jenkins & Jim Reid - Deutsche Bank
The price of oil has been rising all year, but so far it could be argued to have been a supportive influence on spreads as it has kept yields lower than if the oil price had stayed low. Post-Katrina, lower yields undoubtedly cushioned the potential negative economic impacts directly associated with the storm, or indirectly through a higher oil price. The significant rally in yields (UST 10yr hit 4% again) and the complete repricing of the near-term
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