Will crude oil prices recover? Wait a year.

Will crude oil recover? Wait a year.

While looking at seasonality of crude oil prices, it was interesting to discover historical turnarounds we may see in the next 12 months. The recent decline in oil prices as measured by the change in WTI versus the year prior hasn’t been this severe since at least before 1984 – down 69% !

Given over 9000 daily closings thru April 17, 2020, only 0.4% of the time has the WTI been lower than 60% off from the same year prior. Furthermore, each time, the WTI price a year later has increased substantially – up 63% to 124%; and also, an interesting focus on only 6 months (See accompanying tables)

Time to invest in oil? Buy low-sell high – or is it better not to try to catch falling knives.