Drawing from the data provided by the Federal Reserve Bank of St. Louis, we have outlined the cyclical trends in the price of Crude Oil: West Texas Intermediate (DCOILWTICO) from 1986 to 2019.
In the period from 1986 to 1998, crude oil experienced a full cycle that included an increase of +279% and a decline of -73%.
In the period from 1998 to 2001, crude oil experienced a full cycle that included an increase of +243% and a decline of -52%.
In the period from 2001 to 2008, crude oil experienced a full cycle that included an increase of +729% and a decline of -79%.
In the period from 2008 to 2016, crude oil experienced a full cycle that included an increase of +274% and a decline of -76%.
In the period from 2016 to the present, oil has experienced a cycle that included an increase of 195% and a decline of -42%.
The data from the peak in 2018 to the most recent low at $44.48 is provided to reflect the cycle up to this point in time. The table below reflects the date, price, and percentage change (excluding the peak to trough from June 2018 to December 2018). When all declining periods are included, the average decline is -65.04%.
Our assessment of the data, as is commonly the case, is to default to the most conservative scenario. In the case of the latest decline in the price of oil from June 27, 2018 to the present, we calculated the decline of -52.98% as a possible turning point for the price of oil. A decline to such a level would bring the price of oil to $36.40, an additional decline of -29.40%.