Crude oil prices: A look at the 2008 recession and 2023 speculations

By Paul Reid

03 May 2023

oil prices during a recession

Crude oil prices are commonly affected by supply and demand, geopolitical events, and economic crises, and 2023 has all of those influences rolled into one. How will oil react to a recession? Let’s compare crude oil price actions around the 2008 recession and compare it with the current situation, and speculate what might happen when the 2023 recession begins.

Comparing crude oil price behavior in 2008 and 2023

During the 2008 recession, crude oil prices took a major hit. In January of 2008, the price stood at $97.42 (USD) per barrel, but by December of the same year, it had dropped to $30.28. A decrease of 68.9%.

This dramatic price drop came as a result of the decrease in demand and surplus supply of oil caused by the economic downturn, But will it happen again?

Fast forward to 2023. Crude oil prices have been in the $70-$80 range. The fall from $82 to $71 (-15%) in the last two weeks of April has economists pointing fingers, suggesting that this could be an indication that the recession is finally here. 

But, according to global macro models and analysts' expectations, crude oil should hold at the $79.47 mark until the end of Q2 2023, but how is that possible if crude prices fall during recessions?

Trade oil in 2023: bulls vs bears

Oil has always been a tricky asset to forecast with plenty of room for error. Right now, the financial world is divided in regard to where oil prices are going this year.

Bullish forecasts for oil

According to Reuters, Brent oil prices are expected to play around the $90 mark throughout the next five years. Some reports even suggest that the price of crude oil could hit $100 by the end of 2023. A bullish forecast within a recessionary window doesn’t make sense unless the fall has already occurred.

Just one year ago, when we first saw signs and reports of a coming economic downturn, the world braced for a crash that never happened, or did it? Oil was trading high between $100 and $120 at the time. By June 2022, the downtrend was in full effect. Since then, the long slow fall accounts for a 41% decline.

If that long downtrend was the recessionary fall, then Reuters might be right and traders may see a reversal and uptrend, but with economic uncertainty high, it might not happen soon.

Bearish oil predictions

Traders buying oil in the low $70s levels with high leverage and high hopes may face volatility and rapid losses when the recession is confirmed. Market sentiment has real consequences, and even though oil prices are already relatively low, a negative market sentiment may still produce a deeper decline in the coming months.

The previous recession pushed oil down to $30. Long traders, even with low leverage, could face stop outs with little to no warning… a risky proposition.


For now, crude oil has plenty of patterns on the charts for technical traders, and price action is reliably balanced. These are very friendly conditions for day traders, but it might be worth remembering that an overall bearish sentiment may hit hard when a recessionary market is confirmed. Shorting Crude during the coming downturn might not offer significant returns, as the drop isn’t expected to be as deep as with the previous recession. 

It is also important to note that the global oil market has changed significantly since 2008. For example, the United States has become a dominant producer of Shale oil, and there has been a significant increase in renewable energy sources. OPEC, BRICS, and the rumored end of the petrodollar are also factors that could generate surprises, so be sure to set Stop Loss and Take Profit, and watch the charts like a hawk.

If you are planning to trade oil, the Exness Trade app can help you track price actions. With breaking news and customizable price notifications at your fingertips, catching rallies and crashes early is a reality, wherever you are.

This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.


Paul Reid
Paul Reid

Paul Reid is a financial journalist dedicated to uncovering hidden fundamental connections that can give traders an advantage. Focusing primarily on the stock market, Paul's instincts for identifying major company shifts is well established from following the financial markets for over a decade.

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