Recent History of Oil Price
A recent low point was reached in January 1999 of $16 (all prices are in US$ per barrel), after increased oil production from Iraq coincided with the Asian financial crisis, which reduced demand. Prices then increased rapidly, more than doubling by September 2000 to $35, then fell until the end of 2001 before steadily increasing, reaching $40-50 by September 2004. In October 2004 light crude futures contracts on the NYMEX for November delivery exceeded $53 and for December delivery exceeded $55. Crude oil prices surged to a record high above $60 in June 2005, sustaining a rally built on strong demand for gasoline and diesel and on concerns about refiners’ ability to keep up. This trend continued into early August 2005, as NYMEX crude oil futures contracts surged past $65 as consumers kept up the demand for gasoline despite its high price. Crude oil futures peaked at a close of over $77 in July 2006, and in December 2006 at about $63. That is just about where they began the year 2006. In September 2007, US crude (WTI) crossed $80. Multiple factors caused this high price. OPEC announced an output increase lower than expected. US stocks fell lower than experts predicted, changes in federal oil policies , and six pipelines were attacked by a leftist group in Mexico. In October 2007 US light crude rose above $90 for the first time, due to a combination of tensions in eastern Turkey and the reducing strength of the US dollar.
On January 2, 2008, a single trade was made at $100, but the price did not stay above $100 until late February.
Oil broke through $110 on March 12, 2008, $125 on May 9, 2008, $130 on May 21, 2008 , $135 on May 22, 2008, $140 on June 26, 2008 and $145 on July 3, 2008[13]. On July 11, 2008, oil prices rose to a new record of $147.27 following concern over recent Iranian missile tests.
However, oil prices declined by more than $20 over the next two weeks, settling around $125 a barrel on July 24, 2008, A strong contributor to this price decline was the drop in demand for oil in the US. Miles driven there in a month were down in March-May of 2008 compared to 2007, with the 4% decline in May being the largest drop in history. Oil further dropped down to its lowest price in 3 months, at around $112 a barrel, on August 11, 2008, and on September 15, oil price fell below $100 for the first time in seven months.
Long-term oil prices, 1861-2007 (orange line adjusted for inflation, blue not adjusted).