From FT Alphaville:Moi: "Hi Bob, how are things in Dallas?"
Bob: "Well....we're down to two hookers, and one of them's a virgin"
-contemporaneous commentary on how slow things in the oil patch were ca 1986.
Re-re-visiting the 1986 oil crash
As already mentioned, this may not be your usual oil-price decline. But it’s also not crude’s first appearance in the 50 per cent club:
Now, in absolute terms the falls aren’t comparable ($100 to $50 versus $30 to $15) but there are similarities. From Nomura:
Back then, the sluggish global economy and energy-saving initiatives had caused growth in crude oil demand to slow, while at the same time non-OPEC oil-producing countries were increasing production, causing the supply-demand balance in the crude oil market to loosen. OPEC members tried to cut oil production through end-1984, but they failed to gain cooperation both from within OPEC and also from non-OPEC oil-producing countries. OPEC leader Saudi Arabia decided that it could no longer cope with being the only country adjusting its production, and in July 1985 it announced that it would stop playing the role of the world’s swing producer. In September 1985 it increased its crude oil production and effectively lowered prices. At the OPEC meeting in December, OPEC members decided to switch from a policy of focusing on prices to one of focusing on market share, and thus effectively decided to allow crude oil prices to fall.Sound familiar? It really should. Saudi deserves market share, right?...MORE