OIL STILL PRICED 29% HIGHER THAN THE LONG RUN

All too often, many get fooled by numbers. Take the recent drop in the price in West Texas Intermediate.




Far too many believe the price of oil is plunging because OPEC ministers decided to do nothing about production output. However, reality looks different.

In true terms, oil is up a bit more than 1% month to month (GW$6.08 vs GW$6.00). True oil still trades at 1.29 times the true price average ($4.73) excluding manias over the last 29 years.

However, West Texas hit an interim low of GW$5.70 on February 1, 2009. Since then WTI has gained 6.3% in true terms growing at the yearly rate of 1.1% a year.

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WEST TEXAS INTERMEDIATE SPOT PRICE FOB CUSHING, OK IN GWDs

In PARTY OVER OOPS OUT OF TIME. YOU SHOULD HAVE PARTIED LIKE IT WAS 1999, I introduced the concept of the Reagan-Clinton Prosperity vs the Bush(2)-Obama Hard Times.

The average true price of a barrel (42-gallons) of Texas Light Sweet Benchmark  is almost two-fold during the Bush(2)-Obama Hard Times than the Reagan-Clinton Prosperity (1.90:1).

In INFLATION REVEALED! "REAL GDP" AND FEDERAL RESERVE BANK UNITS, I introduced FRBUs. FRBUs give the best measure of inflation since Nixon closed the gold window.

Federal Reserve Bank Units (FRBUs), or if you like better, Federal Reserve Buying Units are what circulate goods and services in the U.S.A. and elsewhere on earth.

De-stabilizing the Middle East has been costly.

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