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Happy Anniversary; The 100 Day Swoon

Depth and Length of Oil Price Drop Approach New Records...

Thursday, November 6th marked the 100-day anniversary of falling oil prices. According to data from Platts, as of Thursday, November 6th, 2014, Dated Brent reached a new low at $82.08. From the recent peak on June 19th ($115.32) to the most recent low on November 6th ($82.08), Dated Brent dropped $33.24.

We are currently only about $6 dollars per barrel drop in price before the current fall overtakes the second largest ever drop in Dated Brent which occurred in 2012. If the price crosses $75.77 it will take over that position, second only to the drop that occurred during the global financial crisis in 2008.

An interesting parallel between the current dip and the one in 2008 is the length of time over which the drop in prices occurred. The contraction in oil prices in 1990/1991 occurred over a relatively shorter 78 day period and that in 2012 over an even shorter 73 days. The drop in 2008 occurred over a much longer 125 day period.

From Sector IQ: Energy, a McGraw Hill Financial Publication

The Energy industry is rapidly evolving. With shale boosting oil, gas, and NGL production in the U.S., the country could potentially become energy independent and a net crude exporter. We have also seen Brent prices fall the third largest dollar amount recorded in a very short period. What will this mean for asset prices, credit risk levels, and the economy more broadly? As our cover indicates, we may be experiencing an Energy Renaissance…

In the second edition of Sector IQ: Energy, we explore why these events are unfolding and what the global implications will be. By leveraging content, analytics, and industry specialists from across McGraw Hill Financial, including S&P Capital IQ, Standard & Poor’s Ratings Services, S&P Dow Jones Indices, Platts and Bentek Energy, we provide a unique perspective and essential intelligence on the energy sector.

Please click here to read the latest report and subscribe to future editions.

From Platts, What is Dated Brent?

Dated Brent is a benchmark assessment of the price of physical, light North Sea crude oil. The term “Dated Brent” refers to physical cargoes of crude oil in the North Sea that have been assigned specific delivery dates and is an important part of the Brent Complex. Taken as a whole, the Brent Complex helps those active in the North Sea crude market to manage the flow of crude oil from well-head to refinery, and manage price risk along the way — not just in crude oil, but also for correlated refined oil products, natural gas, gas liquids and condensates.

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