Long-Term Oil Price Trends

The following chart shows the 5-year, 10-year, and 20-year moving averages of the price of crude oil in inflation adjusted terms (August 2013 dollars).<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2HLCo3QF_JXRoMlekkA2z2o8lIj0T1vojYf0q9fxD5CpCjMAJXSPR2_jKvLzrdEm8zzyeYnh_LXgz60Dx8dVLqos8T-mFbkBkzAnQEc_QD7M-qylyCs2Ri4LyBucJFGFPivquzwSrXfY/s1600/Long-Term+Oil+Price+Trends.jpg" imageanchor="1"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2HLCo3QF_JXRoMlekkA2z2o8lIj0T1vojYf0q9fxD5CpCjMAJXSPR2_jKvLzrdEm8zzyeYnh_LXgz60Dx8dVLqos8T-mFbkBkzAnQEc_QD7M-qylyCs2Ri4LyBucJFGFPivquzwSrXfY/s320/Long-Term+Oil+Price+Trends.jpg" /></a><br /><span style="font-size: x-small;">Click to enlarge.</span><br /><br />There is no good news in the 10-year and 20-year moving averages. Both are currently at record highs and climbing.<br /><br />The only good news here is that the 5-year moving average is rolling over. However, this news is offset by the fact that the <a href="http://www.bloomberg.com/energy/">current price of oil @ $102.73</a> is well above the 5-year moving average. Should it stay there then the rolling over will be temporary.<br /><br />What could cause the 5-year moving average to continue to roll over? A recession brought on by high-priced oil could certainly do it. For the first time in U.S. history (March 2012 to March 2013), the real price of oil averaged more than $90 over a 5-year period (August 2013 Dollars). What a drag.<br /><br />For what it is worth, nothing tends to kill higher prices like higher prices (most bubble watchers would agree). Note that the perpetually increasing upward trend in <a href="http://research.stlouisfed.org/fred2/graph/?g=mHm">total miles driven</a> has failed.<br /><br />No predictions here, simply observations.<br /><br /><b>Source Data:</b><br /><a href="http://research.stlouisfed.org/fred2/graph/?g=mHl">St. Louis Fed: Crude Oil Prices (WTI)</a><br /><a href="http://research.stlouisfed.org/fred2/series/CPIAUCNS">St. Louis Fed: CPI</a>

Long-Term Oil Price Trends

The following chart shows the 5-year, 10-year, and 20-year moving averages of the price of crude oil in inflation adjusted terms (August 201...

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