Oil's Slippery Slope
Crude oil is in the middle of a bad spell, down more than 50 percent since July 2014. A barrel of crude recently fetched about $45 on the Nymex, far from its all-time peak of $145 in 2008. It's among the worst slumps in recent decades -- and it might not be over yet.
That's because, unlike other recent slumps, which were triggered by economic recessions, this one is driven by a global glut of oil supplies. And that glut seems unlikely to retreat any time soon, given the fracking boom and OPEC's refusal to pump less oil. The charts above offer a little perspective on how this downturn compares with recent history.
Few other episodes have been worse, but some have lasted longer. The longer-lasting slumps have been driven by oversupply, as this one is, Bloomberg Intelligence energy analyst Peter Pulikkan noted recently.
This is good news for consumers, but bad news for Big Oil. Royal Dutch Shell on Thursday reported its biggest quarterly loss in a decade because of this bust, joining a chorus of woe from other oil majors. History suggests they might have to buckle up for a long bumpy ride.
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