Blood And Oil

The commodities market moves much faster than television networks. The producers of the new ABC show “Blood & Oil” are learning this the hard way. The series follows the story of a young couple who moves to North Dakota after the biggest oil discovery in American history.

The show was written a few years ago when Oil was still trading above $100 and the oil boom in North Dakota was in full effect. By the time the show was picked up by ABC, cast, and filmed, the price of Crude Oil had suffered one of its steepest declines in history. The oil boom in North Dakota had went bust.

From its peak in 2011 to its low in August of this year, Crude Oil declined over 66%. Going back in history, only the 1985-86 decline of 67% and the 2008-09 decline of 76% exceeded this drop.

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The persistence of the recent decline is perhaps even more remarkable. At 304 trading days, this is now the longest Crude Oil has traded below its 200-day moving average in history.


The effects of the decline in Crude have been far reaching…

  • S&P 500 earnings have declined for 3 consecutive quarters, due in part to the significant drop in the profits from Energy companies.
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  • Credit markets have deteriorated due in part to the anticipation of higher defaults in the energy sector. U.S. high yield credit spreads recently traded at their widest levels since 2012.
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  • The world of distressed investing actually saw some distress again, with one bond index trading down over 50% since June 2014.
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  • Currencies and economies tied to the price of Crude suffered, with the Russian economy (-4.6% GDP growth year-over-year) and the ruble falling.
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  • Inflation around the developed world tumbled, dropping below 0% (year-over-year) in the U.S. for only the second time in the past 30 years.
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    Author: Travis Esquivel

    Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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