RSSMonthly Oil Prices In Constant 2007 Dollars (1946–2008)
This chart expresses the price of oil in constant 2007 dollars. Before the recent run up in prices, the previous record high occurred in April 1980. By this time, the U.S. government had already implemented the so-called CAFE standards (Corporate Average Fuel Economy) to combat an oil shortage driven by policies of the Organization of Petroleum Exporting Countries. The standards raised fuel efficiency in American cars by 7.6 miles a gallon over six years, causing oil imports from the Persian Gulf to fall by 87 percent. The U.S. economy grew by 27 percent during that period and automobile manufacturers figured out how to build more fuel-efficient cars largely without reductions in size, comfort or power.
2 Responses to “Monthly Oil Prices In Constant 2007 Dollars (1946–2008)”
Leave a Reply
You must be logged in to post a comment.
July 30th, 2008 at 8:22 pm
Regarding Gas Prices and Taxes:There is a good article in BusinessWeek magazine – Aug 4 ’08 issue called “The real question about oil – should it be cheap?”. Basically it says we should tax gasoline heavily to discourage gasoline usage and thereby encourage alternatives. Here’s a (fictional) example:
Let’s say oil is at $70/barrel so gasoline is $2.85/gallon. There is no incentive to conserve and alternative energy companies don’t find it
profitable to enter the market.
How about putting a $30/barrel tax on oil so gasoline costs $3.85/gallon so it encourages conservation, encourages alternative energy companies to enter the market, and gives our government much needed revenue?
Moral of the story: We need to tax wisely.
August 2nd, 2008 at 8:33 pm
Thanks so much for providing this service. In looking at the oil price chart, it is easy to see a positive correlation between war and spiking oil prices. Also, from the standpoint of purely technical analysis, the current spike appears to be in it’s last leg up in the cycle. In other words, we are almost certainly looking at another speculative bubble about to burst. It doesn’t mean oil can’t go up further, and even a lot further. However, we are reaching the maximum level of volatility here and any dramatic rise to the upside will soon enough be followed by even more dramatic moves downward.
Many people are now pressuring elected officials to allow offshore drilling as a way to decrease gas prices at the pump. I believe this view is flawed. Even if we legislatively “allow” drilling, this does not mean major oil companies will then drill with a ferocity sufficient to hurt their all time record profits they are enjoying now. In fact, it is very possible that the major oil companies were behind the original banning legislation in the first place. While Exxon spent twenty years in court trying to bargain judges down for a lower settlement on punitive damages, they would not have risked further offshore drilling while trying to convice judges and the public of their side of the case. At the same time, they would not have wanted competitor companies drilling offshore while they were in effect restricting themselves. It is interesting to me that the Supreme Court settled the case finally on June 25th of 2008, and, within just a week of that concluding settlement, we saw a massive propaganda campaign launched by virtually all political talk shows nationwide. Although drilling offshore will probably have little impact on prices, it would be good timing politically to say it would, because prices are likely to decline now no matter what. It is sort of like Merlin calculating the date of the next solar eclipse and then making the people believe he made it happen.
I also like what you have pointed out with respect to this important issue. This is very good and informative information!