Tuesday, September 24, 2013

Long-Term Oil Price Trends

The following chart shows the 5-year, 10-year, and 20-year moving averages of the price of crude oil in inflation adjusted terms (August 2013 dollars).

Click to enlarge.

There is no good news in the 10-year and 20-year moving averages. Both are currently at record highs and climbing.

The only good news here is that the 5-year moving average is rolling over. However, this news is offset by the fact that the current price of oil @ $102.73 is well above the 5-year moving average. Should it stay there then the rolling over will be temporary.

What could cause the 5-year moving average to continue to roll over? A recession brought on by high-priced oil could certainly do it. For the first time in U.S. history (March 2012 to March 2013), the real price of oil averaged more than $90 over a 5-year period (August 2013 Dollars). What a drag.

For what it is worth, nothing tends to kill higher prices like higher prices (most bubble watchers would agree). Note that the perpetually increasing upward trend in total miles driven has failed.

No predictions here, simply observations.

Source Data:
St. Louis Fed: Crude Oil Prices (WTI)
St. Louis Fed: CPI


Troy said...

I've spent the past 2 weeks driving my friend's Leaf around Santa Cruz (house-sitting again).

I get around 4 miles per kwhr. The car charges overnight, so that's 10c for 4 miles, or $1 for 40.

SO great puttering around town not having to think about gasoline costs.

Stagflationary Mark said...


It is my secret hope (not so secret now) that everyone but me converts to electric cars so that I won't have to.

Let's kill off that oil demand! Yes! ;)