COVID-19 is commonly blamed for the industry's current collapse. Our holistic review of the past 45+ years highlights the unique nature of the most recent downturn ('20 price collapse) and how this was a natural outcome at the end of a cycle. Below is our high-level interpretation of the current and historical price collapses and the various contributing factors that shaped each period.
'82 Price Collapse - Global Recession
'86 Price Collapse - Saudi (OPEC) Ceased Production Cuts
'98 Price Collapse - Asian Economic Crisis
'08 Price Collapse - The Great Recession
'14 Price Collapse - Saudi (OPEC) Ceased Production Cuts
'20 Price Collapse - Saudi (OPEC) Ceased Production Cuts/COVID-19 Destroys Demand
Below are a few key takeaways:
Certainly in the last 45 years, if not longer, the industry has not witnessed a downward cycle such as today's. Analyzing the factors that drove each cycle is necessary to guide sound energy investments in the current market and beyond.