Popular Posts
Historical Oil Prices Chart
Oil Rebounds in Inflation Adjusted Terms
Inflation Adjusted Oil Price Chart
Updated - January 19, 2012
by Tim McMahon, editor
This Chart presents Monthly Average Oil Prices. For more information see Annual Average Oil Prices in Table Form.
The red line on the above chart shows oil prices adjusted for inflation in December 2011 dollars. The black line indicates the nominal price (in other words the price you would have actually paid at the time). As you can see current prices in real (inflation adjusted) terms fell from July 2006 until January 2007 but then rose sharply from January 2007 through June 2008.
From there we see one of the sharpest drops in history. Note that the fall from the 1979 peak took until 1986 (7 years) to fall as much (percentage wise) as it lost in only six months in 2009.
In nominal terms, we see a fall from $126.33 in June 2008 to $31.04 in February 09 but by June 09 it is back to $61.46 and by April of 2011 it was back to $102.15. Fortunately, from there it decreased down to $76.90 in September and then started increasing again. The average for the year was $87.04.
During the previous peak price back in 1979 the nominal monthly average oil price peaked at $38 per barrel (although the intraday prices spiked much higher).
The common price quoted is for the all time high of Oil prices is the price that the highest barrel ever sold for. That price doesn't really have any effect on the price consumers paid. What really matters is the average price the refineries had to pay for the whole month.
Interestingly, the highest monthly average occurred in December 1979 while the highest annual high occurred in 1980. Which means prices spiked higher in late 1979 and then declined slightly but overall remained at higher levels throughout 1980 than they were in 1979.
Adjusted for inflation in December 2011 dollars the 1979 $38 peak oil price is the equivalent of paying $111.81 today. (Note: This number is constantly changing as we adjust for inflation at the current moment.
In the 2008 run-up, the annual average price for all of 2008 was nominally $91.48 and fell much lower in 2009 to an average of $53.48. So on an annual average basis, prices were very close to 1979 but slightly below but on a monthly inflation adjusted basis 2008 prices exceeded 1979 prices but for a shorter duration.
As we can see from the chart inflation adjusted prices were slightly higher in 1980 than they were in 2011. And significantly higher in 2008 than 2011.
Note: The prices we use are for Illinois Crude which will be similar but not exactly the same as the NY Crude spot price. Also note that during the 1970's Oil prices were subject to price controls except for "stripper" wells which were exempt. These price controls resulted in shortages and lines at the gas station in addition to some shootings and even deaths due to people "cutting in the gas line". We use the free market stripper prices which more accurately indicate what prices would have been without the artificial price controls.
For more information see: Annual Oil Prices in Table Form.
See also our price comparison of Oil vs. Gold. At $1000 is Gold Expensive?
Subscribe to our FREE monthly E-Zine and we will notify you when this chart has been updated!Webmasters if you would like to use any of our charts please check our usage policy.
For More Information
Inflation Adjusted Prices in "Real Dollars":
Inflation Adjusted Stock Market
Inflation adjusted Education Costs
Inflation Adjusted Oil Prices-
Chart
Table
