THE REAL COST OF OIL

The Dow Jones Industrials sunk an additional hundred points to 7366, a six year low. World markets all declined, most in the 2 to 4% range. Our drop was 1.34%. We most probably will get to 7000, but a 6000 floor is now being discussed. Gold topped $1000/toz today, but ended up $18 up at $994.

Crude oil shot up $5.40/barrel to $40.03. Many are still predicting a drop below $30/bbl before mid-year. Remember the high of $147/bbl in July? The average for 2008 was just under $100/bbl, but this was roughly the price in 2008 dollars in 1980. The lowest price on record in 2008 dollars occurred in 1998: $15.52/bbl. In 1972 BEFORE the first energy crisis, the price was $18.29/bbl.

YEAR......ACTUAL PRICE......ADJUSTED TO 2008
...................$...............................$
1960 ...............2.91 .........................20.88
1972 ...............3.60 .........................18.29
1975 ..............12.21 .........................48.21
1979 ..............25.10 ........................73.44
1980 ..............37.42 ........................97.47
1998 ..............11.91 ........................15.52
2008 ..............99.65 ........................99.65
2009 ............($40??) ....................($40??)

Prices are based on historical free market (stripper) prices of Illinois Crude as presented by IOGA . Price controlled prices were lower during the 1970's but resulted in artificially created gas lines and shortages and do not reflect the true free market price.
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