Oil prices have fallen by more than 50% over the past year, but how much further can they really fall? To answer that question we took a look at the historical spot oil prices and adjusted them for inflation:
The answer isn’t all that comforting. Oil is currently trading at about US$45/bbl, which in current dollars puts it below where it was at the end of 2008, back when global markets were still in the thick of the financial crisis.
To get to the next low point on the chart you have to go back to 2001 and the dot-com crash, when you could have picked up a barrel for a little more than US$26 in today’s dollars. Over the past three decades, the cheapest price for oil was recorded in the fourth quarter of 1998. The price on an inflation adjusted basis: US$17.26 (the equivalent to about $12 back in the day).
MORE ABOUT OIL:
- How to profit from sliding oil prices
- This is already the longest oil price slump in decades
- How fossil-fuel divestment campaigns could affect oil stocks
- How Imaginea Energy founder Suzanne West is greening the oil business
- Oilsands in Canada: no apologies