The start of a new year is a good time to take stock. For those of us in the news business, this suggests stepping back and asking what's important. Here are five economic stories worth watching.
(1) What happens to oil? Saudi Arabia has helped drive down crude prices from roughly $100 a barrel to about $60 by refusing to cut its production in the face of a global surplus and the unwillingness of other producers to cut their output. The question is whether the Saudis will hold to this strategy until enough high-cost producers — including some U.S. shale oil operators — are driven from the market or whether they're seeking some sort of production-sharing agreement with major exporters inside and outside the Organization of the Petroleum Exporting Countries. What's clear is that Saudi Arabia doesn't want to cut output unilaterally.
(2) What happens to Europe? A year ago, the worst of Europe's currency and debt crisis seemed to have passed. Well, maybe not. Greece is now headed for a parliamentary election on Jan. 25, with the possibility that the left-wing Syriza party — committed to ending the austerity policies of the ruling center-right New Democracy Party — might triumph. If Syriza wins and repudiates some debts, there might be spillover to other debtor countries, including Portugal and Spain. Rising interest rates would make it harder for them to service their debts. The crisis could spread.