Oil Price History With Highs and Lows Since 1974

What Makes Oil Prices So Volatile?

From 1948 to 1970, oil prices ranged between $2.50 and $3.00 a
barrel. That's around $17 to $19 a barrel if adjusted for inflation. The
United States was the world's dominant oil producer. It regulated
prices. Domestic oil was plentiful. Cheap oil and gas made the expansion
of interstate highways, interstate trucking, and auto ownership part of
the America Dream. Families moved in droves to the suburbs.

In 1960, Saudi Arabia and other foreign oil-exporting nations

formed OPEC. They wanted more control over oil prices. In 1971,
regulators allowed U.S. companies to pump as much oil as they wanted.
They began using up surplus reserves. As supply fell, prices rose.
America became vulnerable to future shortages

OPEC did not really flex its pricing muscle until President
Nixon effectively took the U.S. dollar off of the gold standard in 1971.
The value of the dollar plummeted, taking oil revenues down with it.
All oil contracts are traded in U.S. dollars, so oil prices follow the value
of the dollar.

In 1973, OPEC halted oil exports to the United States. Its primary
goal was to boost oil prices. It also wanted to punish America for its
support of Israel in the Yom Kippur War. To prevent future shortages,
Congress created the Strategic Petroleum Reserve to provide a 90-day
supply.

Since 1974, oil prices have been volatile.

They are affected by more than the laws of supply and

demand. Oil prices are determined by oil futures contracts on the
commodities markets. That means commodities traders control oil prices.
They will drive prices up even if they only think there will be a surge in
demand, such as during the summer driving season, or a shortage, such as
during the Libyan uprising.
 In 2011, oil prices developed a predictable seasonal swing. Prices
rose in the spring as oil futures traders anticipated high demand for
summer vacation driving. Once demand peaked, prices fell in the fall and
winter.

That changed in 2016. OPEC increased prices in November when

it cut production. It wanted to keep prices high in the face of increased
U.S. production of shale oil and alternative fuels, such as ethanol. The
supply increase had driven global oil prices down to a 13-year low of
$26.55/b on January 20, 2016. As a result, prices responded to OPEC's
actions more than seasonal variations. Today's oil price fluctuates due to
these constantly changing conditions.

Six months before that, prices had been $60/b.

Oil Prices by Year: Average, High, Low, and Events

The following chart shows the prices for imported Brent oil according to
the U.S. Energy Information Administration. The first column shows
the average annual price. It's followed by the high and low oil prices that
year and the month they occurred. It points out reasons for the price
variations and the accompanying events.

Year Average Low High Causes

1973 $4.08 n.a. n.a.
1974 $12.52 $9.59 Jan OPEC oil
$13.06 Jun embargo ended
1975 $13.95 $12.77 Jan $15.04
Nov Stagflation.
1976 $13.48 $13.27 Jan $13.71 Economy recovered
Dec
1977 $14.53 $14.11 Jan $14.76 Fed raised and lowered
Dec rates.
1978 $14.57 $14.41 $14.94
Feb Dec
1979 $21.57 $15.50 Jan $28.91 Iran-Iraq War. Fed Rate
Dec 20%
1980 $33.86 $30.75 Jan $35.63 Iran oil embargo.
Dec
1981 $37.10 $35.43 Oct $39.00 Feb Reagan cut taxes
1982 $33.57 $32.78 $35.54 Jan Recession ends
May inflation.

1983 $29.31 $27.95 $31.40 Jan

Apr
1984 $28.88 $28.02 $29.26 May
Dec
1985 $26.99 $26.21 $27.60
Dec May
1986 $13.93 $10.91 Jul $24.93 Jan OPEC adds to supply.
1987 $18.14 $16.45 Jan $19.32
Aug
1988 $14.60 $12.66 $15.93
Nov May
1989 $18.07 $16.04 Jan $20.05
Dec
1990 $23.73 $15.15 Jun $32.88 Gulf War.
Oct

1991 $18.73 $17.17 $22.30 Jan SPR released oil.

Dec
1992 $18.21 $16.00 Feb $19.83 Jun
1993 $16.13 $12.56 De $18.35 Apr

1994 $15.54 $12.90 $17.52 NAFTA allowed cheap

Feb Jul oil from Mexico.( North
American Free Trade
Agreement's)
1995 $17.14 $16.29 $18.56
Oct May
1996 $20.62 $17.48 Jan $23.22 Oct
1997 $18.49 $15.95 $23.02 Jan
Dec
1998 $12.07 $9.39 $14.33 Jan
Dec
1999 $17.27 $10.16 Jan $24.35 Prices doubled.
Dec
2000 $27.72 $24.29 $30.56
Apr Sep
2001 $21.99 $15.95 $24.63 Recession. 9/11 attack.
Dec May
2002 $23.71 $17.04 Jan $27.14 Afghanistan War.
Sep
2003 $27.73 $24.48 $32.23
Apr Feb
2004 $35.89 $30.11 $45.36
Jan Oct
2005 $48.89 $37.56 $58.79 Hurricane Katrina.
Jan Sep
2006 $59.05 $52.70 $67.99 Bernanke becomes Fed
Oct Jul chair.
2007 $67.19 $49.57 Jan $85.53 Banking crisis.
Nov
2008 $92.57 $35.59 $127.77 Financial crisis.
Dec Jul
2009 $59.04 $36.84 Jan $74.40 Great Recession.
Nov
2010 $75.83 $73.73 $85.59
Feb Dec
2011 $102.58 $87.61 $107.98
Jan May
2012 $101.09 $92.18 Jun $108.54 Iran threatened Straits of
Apr Hormuz.
2013 $98.12 $90.36 $104.16
Nov Aug
2014 $89.63 $57.36 $100.26 The dollar rose 15%.
Dec Jun U.S. shale oil increased.
2015 $46.34 $33.16 $58.89 Jun
Dec
2016 $38.17 $26.66 Feb $46.72 Dec Dollar fell. OPEC cut oil
supply to keep prices
stable.
2017 $48.73 $43.93 $54.38 Dec
Jun
2018 $50.59 $47.50 $67.25
Dec Oct