The big drop in oil like 80s of the last century "lost decade"

Crude oil back memories of a decade of low prices, which began in 1985, when Saudi Arabia turned to increase market share.

Black gold has fallen by nearly half since October last year when oil entered a bear market because the US pumped close to a record pace and China's economic growth slowed. However longest decline for decades, including some chief executive Ben Van Beurden Royal Dutch Shell Plc and the head of "Emerging Markets" at Morgan Stanley Investment Management Inc. Sharma Rushir think that most pain is yet to come.

The current crisis resembles that of 1985 and 1986, according to the report by Peter Pulikan and Michael Kay, analysts from Bloomberg Intelligence.

In 1985, Saudi Arabia changed policy to increase its market share, entering the "lost decade" for oil. There is a possibility to have another "lost decade."

WTI went below $ 10 a barrel in June 1986, averaging $ 20.83 per barrel in 1985 and 1986, about 30 percent lower than the previous two years. Prices fall, but the Saudis did not refuse to reduce production, preferring to protect their market share. Scenario "almost" the same with that of 2015. Is it possible to see prices below $ 20 a barrel?

In the 200-year history of commodity prices suggest that they usually move between a decade of bull market and two decades of the bear market, according to research by Sharma, who helps manage $ 25 billion of assets in Morgan Stanley Investment. It takes years to clear additional capacity to generate the bull market, which means coming "a long winter for the goods," he said.

E.Dimitrov JrTrader