Re: OPEC & Oil Prices - Typos corrected

["廖子光 Henry C.K.Liu 郭??" <hliu@xxxxxxxxxxxxxx>]

Sorry, in a few place 1996 was mistyped as 1966. This is to correct it before Barkley
gets excited. ;-)

Henry

"廖子光 Henry C.K.Liu 郭??" wrote:

>  In the post World War II era oil prices have averaged $19.27 per barrel in 1996
> dollars. Through the same period the median price for crude oil was $15.27 in 1996
> prices. That means that only fifty percent of the time from 1947 to 1997 have oil
> prices exceeded $15.26 per barrel. Prices have only exceeded $22.00 per barrel in
> response to war or conflict in the Middle East.  In 1972, $3.50 oil translates to
> $11.50 in 1996 dollars.
>
> The long term view is much the same. Since 1869 US crude oil prices adjusted for
> inflation have averaged $18.63 per barrel in 1996 dollars. Fifty percent of the time
> prices were below $14.91.
> Using long term history as a guide, those in the upstream segment of the crude oil
> industry structure their business to be able to operate profitably below $15.00 per
> barrel half of the time.
>
> Pre Embargo Period Crude Oil prices ranged between $2.50 and $3.00 from 1948 through
> the end of  the 1960s.
> The price oil rose from $2.50 in 1948 to about $3.00 in 1957. When viewed in 1996
> dollars an entirely different story emerges. In 1996 dollars crude oil prices
> fluctuated between $14 - $16 during the same period.  The apparent price increases
> were just keeping up with inflation.
>
> >From 1958 to 1970 prices were stable at about $3.00 per barrel, but in real terms the
> price of crude oil declined from above $15 to below $12 per barrel in 1996 dollars.
> The decline in the price of crude when adjusted for inflation was further
> exacerbated in 1971 and 1972 by the weakness of the US dollar.
>
> OPEC was formed in 1960 (as you and Barkley have pointed out) with five founding
> members Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.  By the end of 1971 six
> other nations had joined the group: Qatar, Indonesia, Libya, United Arab Emirates,
> Algeria and Nigeria. These nations had experienced a decline in the real value of
> their product since foundation of the Organization of Petroleum Exporting
> Countries.
> That, Paul, is why I said cheap oil may not be in the US's national interest.  Of
> course, neither am I advocating or projecting $100 oil. $18 oil in 1996 dollar will do
> very nicely for all concerned.
>
> Henry C.K. Liu
>