Sunday, January 29, 2012

The High Price of Oil

Brent Yearly Average Price
The price of gasoline, diesel fuel and heating oil is showing no signs of coming back down. A contributor to the Oil Drum ( produced this fascinating chart.

It shows the yearly average of the daily closing price of Brent crude oil, which is a standard based upon the qualities of a handful of North Sea crude oils. Almost all of the Middle East oil sold into Europe and eastern North America is priced off the Brent standard. And that standard has been rising steadily in this century.

In 2008 the price of oil spiked to $145 per barrel before falling back to $30 later in the year. In that year the average price was $96. The average for 2011 was $111 per barrel.

So why is the economy stalled? Why are airfares so high and yet the airlines still face bankruptcy? Why are automobile sales only 60% of the number as recently as 5 years ago? Why has the economy not recovered?

The answer is in the chart.

---- from The Oil Drum ---
In case anyone is interested Brent closed out the year with an average daily closing price of $111.26 a barrel. Below is the average price per barrel in US Dollars. The 2012 average is only for the first four trading days of this year.

    Brent Yearly Average
2000      $28.66
2001      $24.46
2002      $24.99
2003      $28.84
2004      $38.26
2005      $54.57
2006      $65.16
2007      $72.44
2008      $96.94
2009      $61.74
2010      $79.61
1211     $111.26
2012     $112.41

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