Oil price movements can have an economic impact at both the micro and macroeconomic scale. As mentioned, at the macroeconomic level, higher oil prices can make it much more expensive for companies to produce and transport goods or offer services. Rising oil prices can also indirectly raise the costs of production, transportation and heating for businesses, making production more expensive. In turn, producers may choose to pass on those costs to consumers. However, at the microeconomic level, as many consumers are well aware, rising prices at the pump and in stores can cut into discretionary spending that might otherwise have been spent on new electronics, clothes or a vacation. Higher goods and services prices in the long term can dampen demand for those products, leading to slow economic growth or even a recession. The last three recessions were preceded by oil price spikes. “One of the things that can derail a bull market is a spike in oil prices that can cause a recession,” said Paul Hickey, co-founder of Bespoke Investment Group. “When you have higher oil prices, that’s going to impact a key cost for a lot of different businesses.” Nicholas Colas, co-founder of DataTrek Research, would agree. “The rule of thumb I learned from auto industry economics in the 1990s is that if oil prices go up 100 (percent) in a one-year period, expect a recession," he said. However, many economists would argue that rising oil prices don’t cause a recession — the US Federal Reserve does when it raises interests rates in attempt to dampen demand.