Long-Term Oil View

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The drop in crude oil the past couple of months has been absolutely unprecedented and is already in the process of reshaping the financial landscape for years to come.


SlopeCharts has crude oil’s continuous futures contract back to March 1983, and this nearly 40 year history is eye-opening (as always, click on the image for a much bigger version).

I’ve highlighted a couple of interesting phases in this history: the first Gulf War (green tint, showing the lead-up to the war and its aftermath) as well as the big boom in globalization (remember BRICs?) followed by the financial crisis crash.


Even with all this past drama, it is dwarfed by what has happened just in recent weeks. I thoroughly enjoyed David Stockman’s write-up of what this means in the bond market (whose Contra Corner you can learn about here). I also wanted to point out that he wrote the following in The Great Deformation years ago, which proved to be quite prescient: