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Oil Price Not Yet "Extreme"

A report by Deutsche Bank referenced in the Oil & Gas Journal (3/24/08), provides a perspective on the current price of oil.  Some of the points made are:

  1.  Oil pricing is substantially effected by the dollar.  If the dollar were to decline another 4%, the price of oil should reach $120. 

  2.  To reach the prior high in inflation adjusted term the oil price would need to reach $118 .

  3. To equal the oil price equivalent in terms of the average OECD consumer’s purchasing power in 1981, oil would need to reach $134.

  4. To reach an equivalent percentage of global GDP in 1980, oil would need to be $150.

  5. To raise energy expenditures as a percent of U.S. disposable income in the early 1980’s, the oil price would need to be $145.

As I recall, the early 1980’s until the summer of 1982 were not a pleasant economic or stock market environment. 

More on this topic (What's this?)
Gold climbs to $1250, Oil at $200 (Investment U, 5/26/09)
Three Big Reasons Oil Prices Will Rally Back Big Time (Money Morning, 5/23/09)
2009 Crude Oil Forecast (Energy and Capital, 6/15/09)
Read more on Oil Prices at Wikinvest

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This entry was posted on Sunday, March 30th, 2008 at 7:15 pm and is filed under Price of oil. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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1 response so far ↓

  • 1 Paul // Mar 31, 2008 at 1:33 pm

    We don’t know for sure, but it’s safe to assume that oil is fairly stupid and lacks compassion. It doesn’t know what it’s inflation adjusted price used to be. It may not care what the average OECD consumer purchasing power was in 1981.
    The only more meaningless benchmark type research I read lately was that home prices in the US are at all time lows - when expressed in ounces of gold.

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