As markets plunged on that fateful Monday in August, the price of crude oil made a new 6 1/2 year low as it traded down to $37.75 on the active month October NYMEX futures contract. NYMEX crude oil has been in a bear market since June 2014 when it traded at highs of over $107 per barrel. Increasing production from the US, Russia, and OPEC resulted in a supply glut and prices plunged.
In early March, many analysts were calling for oil prices to hit the $30s, $20s, or lower as crude fell to lows of $42.03. Moreover, as many equity indices traded on US markets contain companies in the oil patch, the bear market in oil contributed to the slide in stock prices. Then a funny thing happened on the way to those lower prices: the price proceeded to rally for nine straight weeks and recovered to over $60 per barrel, an increase of over 49%. In July, the price began its decent once again, culminating in the lows on August 24.
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