Publications: The Petroleum Economics Monthly

Oil's Subprime Crisis (January-February 2016)


This double issue of The Petroleum Economics Monthly compares the subprime mortgage collapse that led to the 2009 Great Recession and the more recent collapse in crude oil prices. The evidence suggests the two events share many characteristics. The comparison also leads to the stark conclusion that the energy sector will experience similar consequences, including many financial failures, investor revulsion, and years of very low investment activity. The consequence will be a long period of very volatile price fluctuations around the long-term mean, which is $34 per barrel in today’s prices.


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