[Pops]

Well, I've been waiting for someone to mention this bit of trivia but amidst "Peak Demand", "New Technology", "Huge Discoveries", "Renewables Explode" "Economy Expands" and all the other happy news, the global average oil price broke the all time record last year.

Or as Mr. Corny himself puts it:
$this->bbcode_second_pass_quote('Daniel Yergin', '[')b]“Quite simply, we are looking at the highest average price since the age of oil began.”

[Pops]

Oops, gotta make it official




$this->bbcode_second_pass_quote('', 'T')he crude oil markets sustained high price levels in 2011, as the spot price of Brent averaged $111.26 per barrel, marking the first time the global benchmark averaged more than $100 per barrel for a year (see chart above).

[SeaGypsy]

That was in the back of my brain somewhere, thanks for mapping it out here Pops.
I am predicting approximately a $6 lift in the top price and a buck or 2 for close/ average for the year 2012. If I am right again this year will beat last and so on for the forseeable.
Interesting how we can be blindsided by spot prices.

[SeaGypsy]

If you take out 08 & 09 as anomalies due to the US RE bubble popping the chart shows the trend I have been working on to win the price challenge the last 2 years. How fast can the price continue to rise at this pace? Call it 5-10% after inflation is adjusted. Compound interest is a killer.

[Plantagenet]

The all-time record oil price is the reason why the EU is in recession and China's growth is slowing. High energy prices are the reason why here in the US, in spite of trillions in porkulus and QE1, 2 and 3, the economy can't seem to get going.

I wonder when Obama and the other big-spender dopes in DC will stop worshipping at the alter of Keynesism, and figure out that more government spending isn't going to fix our problems. In the post-peak oil world, the most important thing affecting the economy today is the relationship between oil prices and economic growth.

Every $10 increase in oil price cuts global GDP by about 0.5%.


John Maynard Keynes had no idea of the importance of energy prices in the economy

[ColossalContrarian]

That’s why I love this website, easily understandable common sense replies and textbook graphs a middle-school student can understand.

[dolanbaker]

$this->bbcode_second_pass_quote('Plantagenet', 'I')n the post-peak oil world, the most important thing affecting the economy today is the relationship between oil prices and economic growth.

John Maynard Keynes had no idea of the importance of energy prices in the economy

[ryzaM]

I agree with you. It seems rising in gas price has been part of the individual lives in the whole year round. I've read these article Gas prices will continue to rise, according to it the recent survey says, the price of North Sea Brent crude oil has increased by $7 a 42-gallon barrel in the last two months. These price increase was blamed on the volatility in the Middle East is considered responsible for the wholesale price. Another reason was those Middle Eastern tensions include threats by Iran to block vital shipping lanes, still the higher cost of summer-grade fuel and a decreased refinery capacity They have risen by the pumps across the nation. And now the reduction in consumer spending at the pumps also worries some economists. Consumer spending is necessary for the economy to improve and recover. Using the gas for the better consumption still the best thing to do.

[margaretB]

High gas prices are usually caused by high prices for crude oil, which accounts for 55% of the price of gasoline. This year, concerns about a potential military action, by either Israel or even the U.S., against Iran are causing oil prices to creep up.

[meemoe_uk]

Using inflation adjusted figures is better than non adjusted. But it still falls way short of charting the true cost of oil. In the 70s oil crisis, people couldn't buy gasoline, not because the price was too high, but because there was no gasoline at the pump. A consumer had to barter and haggle with those that had it. So which is more expensive?
Also, the Purchasing Power Parity, a standard of assessing the true cost of a commodity, simply hasn't entered the lexicon on this forum.

In 1997, oil was $12 a barrel
In 2011, WTI Crude Oil is $86, and Brent Crude about $103. About a 9-fold increase in 14 years.
but
In 1970, oil was $1 a barrel
In 1979, oil was $37 a barrel. About a 37-fold increase in 9 years.

The 70s oil shock was measurably 6.4 times harder than today's so called oil crisis. Together with the fact that the peak oil is now hypers ignore PPP, and that me and everyone I know doesn't find gasoline prices to be crippling, strikes me that the true cost of oil today is much cheaper than before.

[dolanbaker]

$this->bbcode_second_pass_quote('meemoe_uk', 'U')sing inflation adjusted figures is better than non adjusted. But it still falls way short of charting the true cost of oil. In the 70s oil crisis, people couldn't buy gasoline, not because the price was too high, but because there was no gasoline at the pump. A consumer had to barter and haggle with those that had it. So which is more expensive?
Also, the Purchasing Power Parity, a standard of assessing the true cost of a commodity, simply hasn't entered the lexicon on this forum.

In 1997, oil was $12 a barrel
In 2011, WTI Crude Oil is $86, and Brent Crude about $103. About a 9-fold increase in 14 years.
but
In 1970, oil was $1 a barrel
In 1979, oil was $37 a barrel. About a 37-fold increase in 9 years.

The 70s oil shock was measurably 6.4 times harder than today's so called oil crisis. Together with the fact that the peak oil is now hypers ignore PPP, strikes me that the true cost of oil today is much cheaper than before.

[meemoe_uk]

>OK so are you going to complete the picture with the relative inflation rates over the same time periods as well.
No, because you are. Peakers out number cornies by 40:1 on this forum. Therefore between you, you should do 40 times the amount of analysis. I've done my bit by pointing out PPP.

[vision-master]

I knew meemoe_uk the tool was going to throw out the inflation argument......... lsol

[dolanbaker]

$this->bbcode_second_pass_quote('meemoe_uk', '[')i]>OK so are you going to complete the picture with the relative inflation rates over the same time periods as well.
No, because you are. Peakers out number cornies by 40:1 on this forum. Therefore between you, you should do 40 times the amount of analysis. I've done my bit by pointing out PPP.

[SeaGypsy]

Tapis is pushing $130 this morning in the east. $127 as I write this.
Brent opening just under $120.
WTI driving with it's foot on the brakes struggling to break out of the band at $102 ish. The Brent / WTI / Tapis spread is becoming more pronounced.

[dolanbaker]

Euro price of Brent appears to be at an all time high
http://www.indexmundi.com/commodities/? ... rrency=eur

[SeaGypsy]

Anyone got a chart of Tapis in Singapore Dollars? I think the same is true there as with Brent/ Euro.

[meemoe_uk]

>I knew meemoe_uk the tool was going to throw out the inflation argument......... lsol
I knew vision_master the tool was going to throw the US PPP to examplify oil prices.

The US and its PPP is not representative of the world economy. It is a special case, where its industry ( which 40 years ago was world #1 ) has been stripped out and sent abroad. Now there are broken communities all over the US.

How come you didn't throw out a developing nations PPP 40 year chart hmm?
How come you didn't show world PPP ?

2ndly, you just made a complete tool of yourself infront of anyone who can understand a graph. On this forum that's me, oilfinder and rockdoc and a couple of others maybe. No one else will have clue what I'm going to say.
2 fails.
- a) its not a oil price graph. You have to combine oil cost with PPP. But you haven't.
- b) its a growth graph, therefore _IF_ we're taking straight PPP to represent the cost of oil, then its not saying US PPP & oil availability is now worse than in 1970s, its saying its 2855 + 3888 - 324 = $6419 better than the 1970s.
You understand? I'd be surprised.

All in all, its exactly what I'd expect from a PO_is_now type. You just gotta block out or burn the past.
$this->bbcode_second_pass_quote('', '.') In the 70s oil crisis, people couldn't buy gasoline, not because the price was too high, but because there was no gasoline at the pump. A consumer had to barter and haggle with those that had it.

[kublikhan]

$this->bbcode_second_pass_quote('meemoe_uk', 'U')sing inflation adjusted figures is better than non adjusted. But it still falls way short of charting the true cost of oil. In the 70s oil crisis, people couldn't buy gasoline, not because the price was too high, but because there was no gasoline at the pump. A consumer had to barter and haggle with those that had it. So which is more expensive?
Also, the Purchasing Power Parity, a standard of assessing the true cost of a commodity, simply hasn't entered the lexicon on this forum.

In 1997, oil was $12 a barrel
In 2011, WTI Crude Oil is $86, and Brent Crude about $103. About a 9-fold increase in 14 years.
but
In 1970, oil was $1 a barrel
In 1979, oil was $37 a barrel. About a 37-fold increase in 9 years.

The 70s oil shock was measurably 6.4 times harder than today's so called oil crisis. Together with the fact that the peak oil is now hypers ignore PPP, and that me and everyone I know doesn't find gasoline prices to be crippling, strikes me that the true cost of oil today is much cheaper than before.

[meemoe_uk]

Well done kub.Your starting statement is right. But your conclusion is wrong.
Are you going to venture where else I could have gotten my figures from?