• About
  • Contact
  • Editorial
  • Policies
  • Archives
Angry Bear
Relevant and even prescient commentary on news, politics and the economy.
  • US/Global Economics
  • Taxes/regulation
  • Healthcare
  • Law
  • Politics
  • Climate Change
  • Social Security
  • Hot Topics
« Back

Real price of oil.

Spencer England | December 18, 2014 10:46 am

US/Global Economics

real oil
Thought people would find this of interest. This is not updated from September being the last observation.

oil share
In 1999 when this bottomed West Texas Intermediate was under $12/bbl

and gasoline was under $1/ gal.

Comments (8) | Digg Facebook Twitter |
8 Comments
  • Lyle says:
    December 18, 2014 at 12:49 pm

    I think the second chart is more interesting showing how the peak energy spending was in the early 1980s after the second oil shock. Also interesting that the share of spending on energy is now below that of the 1960s. (Even with the .22 cent gas of the time, I recall paying .22 per gallon in Ca in 1972 before the first shock)

  • Spencer England says:
    December 18, 2014 at 1:28 pm

    With energy’s share of spending already so low, I worry that everyone may be too optimistic about the stimulative impact of lower oil prices.

    We will get a bounce, but how big will it be?

  • J.Goodwin says:
    December 18, 2014 at 1:32 pm

    Gas certainly feels a lot cheaper than it has anytime since about ’99 for me. Might be an inertial impact on my reckoning though, since the decline has been so precipitous.

    We really should see the impact coming back in lower prices or higher retail margins on all sorts of stuff, and it ought to be considerable. Might even be enough to offset six months of labor price increases in China. We’re seeing something like 14% annual wage inflation there right now…pretty much makes it unsustainable for businesses to stay there.

  • Bud Meyers says:
    December 18, 2014 at 2:54 pm

    FORBES (from 2011): ExxonMobil CEO Says Oil Price Should Be $60 To $70 A Barrel

    “Rex Tillerson, the boss of ExxonMobil admitted last week that the price of oil–based purely on supply and demand- should be in the $60 to $70 a barrel range. The reason it’s above $100 a barrel, Tillerson explained, is due to the oil majors using futures contracts to lock in current high prices, and speculation that is engineered by the high-frequency trading of quantitative hedge funds.”

    http://www.forbes.com/sites/robertlenzner/2011/05/14/exxon-mobil-ceo-says-oil-price-should-be-60-70-a-barrel/

  • rjs says:
    December 18, 2014 at 5:18 pm

    re: We will get a bounce, but how big will it be?

    November’s seasonally adjusted spending at gas stations (which includes more than gas) fell 0.8%, from $43,921 million to to $43,578 million…total retail sales rose from $446,066 millin to $449,282 million, about ten times as much as gas station sales fell….

    if you figure gas stations as all gas, it’s less than 10% of retail sales, and retail is about 1/3 of PCE…so every 10% of gas savings could translate into a ~0.3% bounce in PCE, assuming that it’s all spent…

  • rjs says:
    December 18, 2014 at 5:48 pm

    on energy as a percentage of PCE, do you have a breakout of what percentage of that is gasoline, diesel, heating oil, piped gas and electricity?

    over the last 5 years, we’ve had quite a decoupling…as oil prices, and hence gasoline and diesel, were rising, natural gas prices were falling from around $12 mmBTU to below $3 mmBTU….it was only last winter’s polar vortexes that pulled the gas driller’s bacon out of the fire, causing a spike up to above $5 mmBTU…

  • Kaleberg says:
    December 19, 2014 at 12:21 am

    Spencer England: Don’t forget that graph of expenditure percentage is an average. For the increasing number of folks at the low end of the income distribution, gasoline is a fairly large expense, and every penny saved on it will be spent on something else.

  • Spencer England says:
    December 19, 2014 at 11:33 am

    The data on PCE is from the BEA and they do not break it down any more than this.

Featured Stories

Macron Bypasses Parliament With ‘Nuclear Option’ on Retirement Age Hike

Angry Bear

All Electric comes to Heavy Equipment

Daniel Becker

Medicare Plan Commissions May Steer Beneficiaries to Wrong Coverage

run75441

Thoughts on Silicon Valley Bank: Why the FDIC plan isn’t (but also is) a Bailout

NewDealdemocrat

Contributors

Dan Crawford
Robert Waldmann
Barkley Rosser
Eric Kramer
ProGrowth Liberal
Daniel Becker
Ken Houghton
Linda Beale
Mike Kimel
Steve Roth
Michael Smith
Bill Haskell
NewDealdemocrat
Ken Melvin
Sandwichman
Peter Dorman
Kenneth Thomas
Bruce Webb
Rebecca Wilder
Spencer England
Beverly Mann
Joel Eissenberg

Subscribe

Blogs of note

    • Naked Capitalism
    • Atrios (Eschaton)
    • Crooks and Liars
    • Wash. Monthly
    • CEPR
    • Econospeak
    • EPI
    • Hullabaloo
    • Talking Points
    • Calculated Risk
    • Infidel753
    • ACA Signups
    • The one-handed economist
Angry Bear
Copyright © 2023 Angry Bear Blog

Topics

  • US/Global Economics
  • Taxes/regulation
  • Healthcare
  • Law
  • Politics
  • Climate Change
  • Social Security
  • Hot Topics
  • US/Global Economics
  • Taxes/regulation
  • Healthcare
  • Law
  • Politics
  • Climate Change
  • Social Security
  • Hot Topics

Pages

  • About
  • Contact
  • Editorial
  • Policies
  • Archives