[Tyler_JC]

Inflation is an extremely fuzzy number.

It's rather difficult to get an exact point for the highest inflation adjusted oil price ever.

I think it's somewhere between $100 and $105.

We have either hit that point or surpassed it.

Inflation calculator

The 1980 price was $38 a barrel (if I recall correctly). In 2007 dollars, that's $107.21 according to this particular calculator.

Given that this price probably wasn't reached until midway through the year, the inflation adjusted price in 2007 dollars is probably in the $100-$105 range.

However, the gap between the highest price ever and the current price is tiny.

Another thing to consider, when oil hit its 1980 peak, the yearly inflation rate was extremely high. depending on what month you use as your base year, the 2008 price could be very different.

[frankthetank]

I think the weak dollar is one main cause of $100 oil, at least right now. Look at it vs the Euro. I can't believe these countries don't make the switch.

[heroineworshipper]

Since oil is the root cause of inflation, it will never break inflation adjusted records. No-one said that & I was never here.

[jasonraymondson]

Didn't take the time to find the oil thread, but we now have a steady $100.00 oil

{thread merged by emersonbiggins}

[Roy]

Well according to this calculator provided by those paragons of honesty and accurate reporting at the Federal Reserve,

$38 in 1980 = $99.43.

[Ferretlover]

It may seem silly to say, but it doesn't really matter what the price was in 1980. That was 28 years ago.
"When all else fails, manipulate the data."
What matters is what the price is now, to us.

[PenultimateManStanding]

$this->bbcode_second_pass_quote('jasonraymondson', 'D')idn't take the time to find the oil thread, but we now have a steady $100.00 oil

[Roy]

I hear you Ferretlover... You're absolutely right!

I think the Fed's inflation calculator is a real hoot though. Try plugging in what you made, say 10 years ago, and see what it would be would be worth now... This calc uses the 'official cpi'.

Freaking joke.

[What2DO]

$this->bbcode_second_pass_quote('Roy', 'W')ell according to this calculator provided by those paragons of honesty and accurate reporting at the Federal Reserve,

$38 in 1980 = $99.43.

[Roy]

Frankly I'm not surprised the Fed's own calculator might be slightly understating reality. They have been known to obfuscate, mislead, and generally not tell the truth.

Or, you believe, like so many Americans that they are actually a part of our caring, concerned, and competent government.

As you might have guessed, I don't fit the 'normal American' classification.

[mididoctors]

very approx in 1980 in the UK you could sell your average uk house and with proceeds buy 300 barrels of oil

in 2008 you can sell your avergae uk home and buy nearly 2000!

readjustment?

you bet yer...

what economic activity has my house done to justify this increase in value against a irreplaceable resource?

Frankly the price is meaningless as in meaning less than it did.

what is the price telling us?

Boris
London

[Concerned]

The price of inflation adjusted oil started off at about $80 two years ago then it has steadily risen to advance past any current price.

What they should also do is inflation adjust incomes (high/mid/low) and then compare his purchasing power inflation adjusted to the adjusted oil price. Not very for many people in the US.

High income earners can go out and buy a hummer

[mos6507]

The news outlets will continue to reach for statistics for a while to spin this away from a crisis (like the old headlines '$100 oil, no problem'). Beyond some tipping point it will be clear that we're in a full fledged and permanent oil crisis.

[ccricers]

We already passed the inflation-adjusted high of US gas prices last spring/summer. And that did make the news.

I think the CPI (consumer price index) is a better barometer of where we stand at the moment.

[Gazzatrone]

So in 1980 oil cos $38 but actually cost $107, because of geo-political, recessionary influences and a whole load of other baloney thrown in.

In 2008 we are paying $102 for a barrel of oil, with no real economic influences such as coming the back of 1970's fuel crisis, recession, geo-political instability and high inflation.

If this in fact the case should we not be worried if just one of those criteria that forced the "adjusted for inflation" figure of $107 kick in?

[WildRose]

$this->bbcode_second_pass_quote('Gazzatrone', 'S')o in 1980 oil cos $38 but actually cost $107, because of geo-political, recessionary influences and a whole load of other baloney thrown in.

In 2008 we are paying $102 for a barrel of oil, with no real economic influences such as coming the back of 1970's fuel crisis, recession, geo-political instability and high inflation.

If this in fact the case should we not be worried if just one of those criteria that forced the "adjusted for inflation" figure of $107 kick in?

[emersonbiggins]

$this->bbcode_second_pass_quote('KevO', 'b')ut it's bloody close..

$this->bbcode_second_pass_quote('', 'T')he price of oil has hit a record high for the second day running, touching $102.08 a barrel for US sweet crude.

However, the figure is still surpassed in inflation-adjusted terms by the peak of $102.53 reached in 1980, the International Energy Agency says.

"[Opec] appears reluctant to heed requests from Western leaders to add more barrels to the market in order to soften prices," said Robert Laughlin at MF Global.

[FireJack]

We still havn't hit the driving season yet either. Things are falling apart faster than I thought they might actually, was rather pessimistic about it too. Just keep preparing for the worst I guess.

[Concerned]

$this->bbcode_second_pass_quote('FireJack', 'W')e still havn't hit the driving season yet either. Things are falling apart faster than I thought they might actually, was rather pessimistic about it too. Just keep preparing for the worst I guess.

[IslandCrow]

With that target behind us, what is the next (psychological) target for the price of oil that we will have to watch for? Is it actually in the crude price, or will it be in the retail price that we need to pay?


[gloat]having to pay Euros means that there has been very little change in what I need to pay to fill up the car despite this run up in price[/gloat]