How Unusual Is a Bear Market in Oil?

A story in USA Today yesterday began "Finally, investors have a bear to get excited about. Oil now is in unofficial bear market territory, with the price of a barrel of crude falling to $115.20, down 21% from its July 3 peak."

A good question to have asked prior to writing an article such as this, something that apparently doesn't occur to the new "oil bear market" enthusiasts, is whether a 20 percent decline in the price of crude oil is unusual or statistically significant in any way.

It doesn't take too much work to realize they happen just about every year.

 

Comments

[MarkMedayski:]

The analyst that wrote in USA Today Crude Oil is in a bear market,bust be stupid same as all the others who believe such idiots.
The Oil is in a baby bull market that only gets first feathers,first small wings,learns his first song.
Somebody who wants to sell today Crude Oil at 113$ per barrel,better go and hung himself,as he is going to lose everything.
In real terms CL is at the same price it was in the 1970's,if one thinks since then there are more oil on the planet earth and nothing has been used since then and dissapeared into the atmosphere forever by burning,must be at least crazy.
The global oil reserves probably declined since then by some little change and even if demand stayed the same (did it?) the 113$ a barrel is more than the undervalued.Think again if you want to make money going short energies,already if you are bear in nature,like me,use your money shorting the Dow Jones with 20% margin required to sleep well at night and I promise you will have a lot of fun.

2008 Aug 12 07:23 AM

[jetsby10:]

Bear market? Maybe GM should fire up those SUV factories again. NOT!

2008 Aug 12 01:17 PM

[Kunst:]

"stupid", "idiots", "crazy" -- if you have something useful to say, just say it. This kind of language adds nothing to your credibility.

2008 Aug 17 11:55 PM