Historical Oil Prices Chart

Oil Rebounds in Inflation Adjusted Terms

This Chart presents Monthly Average Crude Oil Prices and Inflation Adjusted Oil Prices

For more information see Annual Average Oil Prices in Table Form.

The red line on the above chart shows oil prices adjusted for inflation in January 2014 dollars. The black line indicates the nominal price (in other words the price you would have actually paid at the time). As you can see current prices in real (inflation adjusted) terms fell from July 2006 until January 2007 but then rose sharply from January 2007 through June 2008.

Inflation Adjusted Oil Price Chart

Inflation Adjusted Oil Prices Chart

From there we see one of the sharpest drops in history. Note that the fall from the 1979 peak took until 1986 (7 years) to fall as much (percentage wise) as it lost in only six months in 2009.

In nominal terms, we see a fall from $126.33 in June 2008 to $31.04 in February 09 but by June 09 oil is back to $61.46 and by April of 2011 it was back to $102.15. Fortunately, from there it decreased down to $76.90 in September and then started increasing again. The average for the year 2011 was $87.04. 2012 was very close with the nominal average price being $86.46. Crude oil prices rose in 2013 to an average price of $91.17.

During the previous peak price back in 1979 the nominal monthly average oil price peaked at $38 per barrel (although the intraday prices spiked much higher).

The common price quoted is the all time high for Crude Oil prices i.e. the price that the highest barrel ever sold for. That price doesn't  really have any effect on the price consumers paid. What really matters is the average price the refineries had to pay for the whole month.

Interestingly, the highest monthly average price occurred in December 1979 while the highest annual high oil prices occurred in 1980.  Which means prices spiked higher in late 1979 and then declined slightly but overall remained at higher levels throughout 1980 than they were in 1979.

Adjusted for inflation the 1979 $38 peak oil price is the equivalent of paying $113.86 today. (Note: This number is constantly changing as we adjust for inflation at the current moment.

In the 2008 run-up, the annual average price for all of 2008 was nominally $91.48 and fell much lower in 2009 to an average of $53.48. So on an annual average basis, prices were very close to 1979 but slightly below but on a monthly inflation adjusted basis 2008 prices exceeded 1979 prices but for a shorter duration.

As we can see from the chart, inflation adjusted prices were higher in 2008 than they were in either 2011 or 1980, but in 1980 the prices stair-stepped down rather than falling sharply as they did in 2008. 

Note: The prices we use are for Illinois Crude Oil (Sweet) which will be similar but not exactly the same as the West Texas intermediate or  NY Crude spot price.  For instance in March of 2013 West Texas Intermediate crude averaged $90.50/ barrel while Illinois Sweet averaged $87.50. Oil prices vary based on grade (Sweet, Intermediate or Sour) and location i.e. how easy it is to get it from the field to the refinery and also based on supply in that area. So just "West Texas" has three different prices, West Texas Intermediate - Area #1 $90.50, West Texas Intermediate - All Other Areas $91.00, West Texas Sour $83.05. West Texas Sour is worse quality than West Texas Intermediate (requires more refining) at the same time South Texas Sour only brings $79.00 presumably because it is more difficult to get South Texas Sour than West Texas Sour.

Also note that during the 1970's Oil prices were subject to price controls except for  "stripper" wells which were exempt. These price controls resulted in shortages and lines at the gas station in addition to some shootings and even deaths due to people "cutting in the gas line".  For prices during this period, we use the free market stripper prices which more accurately indicate what prices would have been without the artificial price controls. 

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For more information see: Annual Crude Oil Prices in Table Form.

See also our price comparison of Oil vs. Gold.  At $1000 is Gold Expensive?

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See Other Inflation Adjusted Prices in "Real Dollars":

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