[jedinvest]

I am looking over the history of crude oil prices and relating them to Presidencies and recessions and I see a lot of correspondences.

Historical Oil Prices:

http://inflationdata.com/inflation/Infl ... _Table.asp

For instance:

I see Jimmy Carter's presidency torpedoed by high oil prices at the end of his term and Reagan's presidency taking advantage of gradually decreasing oil prices -- at least for the popular impression that his Presidency was a success. Even Clinton appears to have scored the highest in this regard with crude oil prices under $11/barrel!

What is the explanation for such a low price?? It does seam that our appetite for large and fast cars was stoked at that time, while everything else, climate change and conservation was given the back seat.

What is the general explanation how prices got so low at that time?

[Tyler_JC]

1998: A Year Of Infamy

That article pretty much explains it.

"According to the most widely used petroleum supply and demand numbers in the world, which are produced on a monthly basis by the International Energy Agency (IEA), worldwide petroleum supply apparently exceeded demand by some 2.4 million barrels per day (MMbpd) through first-half 1998. Over the next five months, through the end of November, the excess supply fell to about 300,000 bpd, but the "damage" was already done, as bulging stocks made it hard to find places to even store the excess supply of some finished products."

Oversupply lead to declines in prices.

Same reason today's tiny supply margin is leading to higher prices.

[aahala]

1998 is sometimes referred to as the "Asian depression".

I don't recall now what triggered it, but before that $100 billion
or so of investments was flowing into the region creating millions
of jobs. The flow pretty much stopped on a dime, deflating oil
demand.

There was enough concern at the time this might lead to
a worldwide depression, that the US and other governments
made so moves to calm the situation.

[mekrob]

From what I remember, while the US's economy was very strong, there was an Asian market crash which crushed demand in the region, which increased the excess oil on the market, pushing down prices. Of course, since then, the Asian and world economy have been pretty strong, thus pushing oil prices up and up.

[threadbear]

And why was there a flood of oil? Opec didn't have it's act together. The cartel weakened and some of the oil producing nations were undercutting each other by ignoring quotas.

[jedinvest]

Tyler_JC wrote:$this->bbcode_second_pass_quote('', 'T')hat article pretty much explains it.

[Fiddlerdave]

I can't help that think an oil man president and vice president starting his presidency with a major secret "energy summit meeting" attended by oil company representatives having some effect on our current situation. Just a guess.

[threadbear]

$this->bbcode_second_pass_quote('Fiddlerdave', 'I') can't help that think an oil man president and vice president starting his presidency with a major secret "energy summit meeting" attended by oil company representatives having some effect on our current situation. Just a guess.