150 Years Of “Real” Oil Prices

24 Comments on "150 Years Of “Real” Oil Prices"

Beery on Tue, 15th Jul 2014 6:32 am 



I don’t get it. Am I missing something, because I thought the price of oil in 2008 got to nearly $150/bbl. Was Brent that much cheaper, or does the graph show some sort of average price?

Pops on Tue, 15th Jul 2014 6:59 am 



It’s a yearly averaged price. My spreadsheet has a running 365 day average (a simple average of the official closing Brent price) at $109.36 at the end of June.

Brent topped out at $143.95 july 3 2008 but it only closed over $140 on 5 days, and only over $120 between May 3 and August 4 of that year.

The 365 day average has exceeded $107 continuously since April of 2011.

Plantagenet on Tue, 15th Jul 2014 7:34 am 



Most economists are mystified why the economy isn’t growing faster. They need to look at this chart.

meld on Tue, 15th Jul 2014 7:36 am 



Well would you look at that!

seems like oil price are inexplicably going up since the peak in 2007, who would’ve guessed it?

Shale bubble about to pop, oil prices explode, economise can’t handle it and take another huge step down, oil prices find a new level at $150, rinse and repeat for the next 100 years.

westexas on Tue, 15th Jul 2014 7:48 am 



As I have periodically noted, when we ask for the price of oil wet get the price of actual crude oil (45 or lower API gravity crude), but when we ask for the volume of oil, we get some combination of crude oil + condensate + NGL + biofuels + refinery gains.

In my opinion, actual global crude oil production has been approximately flat to down since 2005, while global natural gas production and associated liquids (condensate and NGL) have so far continued to increase.

Zaptastic on Tue, 15th Jul 2014 8:07 am 



What a distortion. Only three or four people used crude oil back in 1861. How is that relevant to today’s economy?

@Beery the $147/barrel in 2008 was for too brief a moment to show up in a chart that displays large averages of time.

newfie on Tue, 15th Jul 2014 9:08 am 



It’s the most expensive it’s been in over 100 years. Duh-oh!

GregT on Tue, 15th Jul 2014 9:26 am 



150 years ago, the entire global economy wasn’t completely reliant on oil.

rollin on Tue, 15th Jul 2014 9:57 am 



Looks to me like inflation is way understated in this graph. Especially after 1960.

dissident on Tue, 15th Jul 2014 10:02 am 



If the Iranian revolution associated price spike produced the deep 1980-81 recession, then how can we possibly not be in a recession today? The economy was just as diversified in 1980 as it is today, in fact it was more diversified in the developed countries since they still had their manufacturing and the offshoring to China was still in the future.

The only conclusion is that official statistics today are a total lie. The inflation rate is a lie and the claim that the economy is growing is a lie.

rollin on Tue, 15th Jul 2014 10:36 am 



Dissident, the US still is a manufacturing major in the world. The hokum about the US not being a manufacturing power is wrong. About 2 trillion dollars worth a year. China just surpassed a short time ago. The Eurozone is right behind us. Manufacturing has

It appears that the US has little manufacturing because of the small workforce. However productivity in US manufacturing is about 10 times higher than China (machines replacing workers).

I agree that the inflation rate is a lie, way too low. They don’t want to scare the populace.

JuanP on Tue, 15th Jul 2014 10:53 am 



I am so curious about how all this will play out, I can’t stop myself from coming back for more every day. This is already a new normal, things have changed and continue changing on multiple levels. Even on camping, fishing, and boating days, I want my PO, demography, and ACC news with my morning coffee.
Thank you, Internet!

eugene on Tue, 15th Jul 2014 11:22 am 



I find “numbers” to be relatively meaningless. Yes the US is still a manufacturing major. My question is in what? Is it all high end products? Productivity figures are meaningless when machines put millions out of work. Few yrs ago, I had a discussion with a businessman returning from China. His view was “yes they do a lot by hand but their people are employed”. People hyping the US love these, relatively, meaningless figures. They prove the point of their agenda. Numbers distort and, often, hide the broader picture.

shortonoil on Tue, 15th Jul 2014 11:33 am 



The graph is a volumetric presentation. It is $ per unit volume of petroleum. Petroleum doesn’t run the economy, it is the energy that is derived from it that does. On a BTU/$ bases (energy intensity) the world in 2012 payed 601% more for a BTU from petroleum than it payed in 1975. If you want to know why the economy has stopped growing, and is now reeling out of control – look no further!

http://www.thehillsgroup.org/

rollin on Tue, 15th Jul 2014 3:12 pm 



Eugene, the US accounts for 20 percent of the world’s manufacturing output. It does not make many consumer goods other than cars but it makes huge amounts of high tech, chemicals, adhesives, food products, electronic components, high tech equipment, farm equipment, locomotives, plastic parts, precision cutting systems, machine systems, space, aircraft and military technology etc. etc. etc. To the tune of 2 trillion a year.
No it doesn’t do as much of the basic heavy manufacturing as it used to, other countries can do that. Still, that cell phone you use has components made in the US and adhesives made here.

As far as machines taking jobs, tis true. Simple repetitive jobs fell by the wayside and higher tech jobs grew. No paradise here when you don’t have a specific business, tech or entertainment industry background. Pick and shovel work is limited. Truck and train driving is still a hands on operation as well as construction.

The real estate industry is our biggest sector followed by government, finance and insurance, healthcare and durable goods manufacture.

MSN Fanboy on Tue, 15th Jul 2014 3:16 pm 



…..Have you guys seen shortonoils graphs…..?
Dead state by 2030? how do you predict this short?
What does a dead state look like?

Northwest Resident on Tue, 15th Jul 2014 3:32 pm 



“What does a dead state look like?”

Lots of local food production and local economies — best case scenario. Very little government — also best case scenario — unless you actually need government, in which case very little government could end up being worse case scenario. Not a lot of people. No more welfare or food stamps, that’s for sure. No more traffic jams — or electricity or water service — take the good with the bad.

I asked shortonoil about that 2030 prediction one time. It is based on everything continuing along its relatively stable path toward logical conclusion. It does not account for geopolitical events, natural disasters, sudden failures in key oil producing fields or economic collapses. In fact, if I recall correctly, shortonoil gave the probability of BAU making it to 2030 about zero percent chance, which sounds about right to me.

J-Gav on Tue, 15th Jul 2014 5:47 pm 



Don’t know about “dead state,” but by 2030 the complexion of things will have changed to an extent that most people would find unimaginable today. An unrecognizable world.

Of that much, I’m pretty sure. Exactly how much of what we now have will be left and the details of how the unraveling will play out is anybody’s guess at this point but I wouldn’t expect it to be particularly pleasant.

Craig Ruchman on Tue, 15th Jul 2014 8:31 pm 



Price is not the main issue, its dependence. It is one thing to have used a bit of expensive lamp oil 150 years ago, but another thing entirely to be dependent on the stuff in car based suburbia. Our energy slave has become our master

Davy on Tue, 15th Jul 2014 9:01 pm 



Gav, I think if you look at the systematic implications of descent down an energy and complexity gradient I doubt 2030 is a likely scenario more likely 2020. If I remember you have mentioned 2020 time frame before.

shortonoil on Wed, 16th Jul 2014 10:05 am 



MSM said:

“Dead state by 2030? how do you predict this short?”

The “dead state” is a term used in thermodynamics. It refers to the point where no additional work can be extracted from a system. For example, a glass of ice on a table that has melted, and its temperature has become equal to its surroundings, has reached the “dead state”. No further changes of state are possible without inputting energy. The 2030 “dead state” referred to in the study is the point where work (energy) will no longer be provided by the “average” barrel of petroleum. Of course, some barrels will reach the dead state before others, it is an average. The problem will be that what is still usable by that date will be so expensive not many will be able to afford it.

As to exactly how we arrived at that determination is in the study. It is a 57 page engineering report, and requires a good back ground in the physical sciences and mathematics. Of course, we highly recommend it if you have the skill set to use it (lol). Of the several hundred we have shipped to date we have not yet received one negative criticism of the study’s methodology. It foundation in 1’st and 2’nd Law principals makes it rather definitive.

If you have a specific question get a hold of me at the “comment” section of the site.

http://www.thehillsgroup.org/

rollin on Thu, 17th Jul 2014 7:48 am 



Short, are you talking about net energy reaching zero? This can be viable as long as other energy sources are involved in the process (using nat gas to convert tar to synthetic gasoline).

The corporations don’t give a damn if there is a net energy loss of zero net as long as they make a profit. If you use a cheap source of energy to produce or convert a more valuable source, net energy can be negative. I think that is happening in some cases already.

In fact most of our products are energy sinks, where we do not get any energy out of them but get other functionality.

When the profit disappears so does the energy.

rollin on Thu, 17th Jul 2014 7:54 am 



“The corporations don’t give a damn if there is a net energy loss of zero net”

Should read: The corporations don’t give a damn if there is a net energy loss or zero net..

Davy on Thu, 17th Jul 2014 8:03 am 



Rollin, true, a target return on investment is what matters. BUT, macro financial and geologic realities do not follow very far behind for example in the oil industry. The market makers can only distort true net productivity so long. Eventually reality comes into the room and takes what is hers. SO, corporations eventually have to reality test and preform risk management on any new investments. There are no free lunches only scraps and credit with the lunch lady.