In the first chart below, we show the average path that crude oil has taken throughout the trading year over the last ten years.  As you can see in the chart, for the last ten years, WTI crude has been a phenomenal bet in the first half of the year and a rocky one in the second half.  But broad averages (first chart) obscure a lot more complexity under the surface.  As we show in the second chart, the range of those 10 years was much, much higher; to the tune of 45% of price in some spots!  Indeed, this year alone we’ve seen significant departures from the recent seasonality with prices plunging in late winter, then again in late summer, both to decade lows versus the price they started the year with.  In our final chart, we show the actual path of prices for each of the last ten years, indexed to 100 as-of the start of the year.  As shown, price action is far more diverse than might be indicated by averages; outliers tend to drive a large share of the overall trend.

ESR 1

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