The price of oil fell through $60 a barrel last week and has now fallen over 40% since July.
This essay is a follow up to the audio lesson on oil I released last week.
This drop in the oil price is an excellent example of how markets are “clumpy” in that large moves are often compressed in to short periods of time. They cluster. This oil price decline is a classic extreme event as falling prices, prompt more selling and more falling prices.
There is definitely an element of panic as the negative sentiment toward oil has not been this high in over 12 years.
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