Cheap oil has increased college enrollment in North Dakota. Jobless laborers who were earning as much as $120,000 a year are now going back to school.
Cable channel Al Jazeera America said it is shutting down in April. Qatar-backed, the station’s funding appears to have evaporated.
Saudi Arabia has increased its subsidized price of 95 octane gasoline from 0.60 riyals to 0.90 riyals ($.24) per liter. (With one gallon equal to three liters, the U.S. average gasoline price is close to $.59 a liter.)
Where are we going? To the fluctuations in the price of oil.
Oil Price History
With oil at $29.42 on January 15, the following graph shows its precipitous price drop. Until their recent plunge, prices were above the historical norm:
Inflation Adjusted West Texas Intermediate (gray lines show recessions)
Here is the same graph but with nominal, unadjusted prices. In 1946, a barrel of WTI was $1.27.
Our Bottom Line: Expensive and Cheap Oil
On March 7, 2008, the MarketWatch headline said, “New ‘super-spike’ might mean $200 a barrel oil.” Last week, a Telegraph headline told us that, “Oil could crash to $10 a barrel…”
While we never did have $200 oil, it brings to mind a quote that might have come from John D. Rockefeller. Asked about about Standard Oil stock, he provided wisdom about all markets:
“I think it will fluctuate.”