Crude bear market: History says oil prices can fall another 10%

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WTI crude and Brent crude are both near bear markets in 2020, with declines of roughly 17%. Trading history in the past decade suggests oil prices can fall by as much as 10% more.

has averaged a decline of 1.6% during these one-month trading windows and posts a negative trade 60% of the time.

The trading action in WTI crude and Brent crude through Monday has been rough, as fears of the coronavirus ripple through the global economy, and China, which now represents near-20% of the world's economy, is at risk of seeing slower growth. WTI hit its lowest settle price since January 2019 and has been negative in nine of the past 10 sessions, settling below its 50-day moving average for the 15th consecutive day. WTI is currently in bear market territory, according to CNBC data, 24.76% off its most recent 52-week high of $66.60, hit in April 2019.

Brent had its lowest settle price since December 2018 on Monday and is in bear market territory, 27.98% off its most recent 52-week high, from April 2019. It has been below its 50-day moving average for 10 days in a row.An oil well owned and operated by Apache Corp. in the Permian Basin of Garden City, Texas.

"We're certainly going to take a trip down in the upper $40s for a time here, potentially the low $40s, but that's as far as I'll go. We just don't know enough," John Kilduff, partner with Again Capital, told CNBC on Monday.BP's CFO Brian Gilvary told Reuters on Monday that the economic slowdown brought on by the virus will reduce oil consumption for the whole year by 300,000 to 500,000 barrels per day , roughly 0.5% of global demand.

 

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