While US equities are set to trade lower on this holiday-shortened day after Thanksgiving, the big story is the sharp drop in crude oil prices. Crude is trading down over 5% this morning to another 52-week low near $50 per barrel. Looking at the chart, it’s amazing to see how sharp and fast the drop has been from what were multi-year highs just a few short weeks ago. In the span of just 36 trading days, prices have dropped by about a third!
Looking back at crude oil declines over time, the magnitude of this drawdown is right up there with some of the biggest on record. The last time prices were down this much from a 52-week high was in 2015 and 2016, but the key difference between now and then is that the magnitude and length of this decline (at least up until this point) has been shorter and less severe.
We realize that measuring a 36-day rate of change is a bit arbitrary, but just to show how sharp a decline this has been, there haven’t been many other similar lengths of time where crude oil declined more over a such a short period of time.
