Oil price record levels is (still) a myth

Since June media has been hammering the same message over and over again – oil has never been as expensive as now. True, and false. It is true that the different statistics that go back to 1983 or 1988 show that the oil price has not been higher during the period from the mid 80s up til now. False, because they only look on the actual dollar per barrel price, not adjusted for inflation, and the prices in 1980 were much higher, and the period before 1983 is excluded.

Stats that don’t take inflation into consideration are just fluff, it doesn’t mean anything. If your salary today was slightly higher in dollars than it was in 1980, you wouldn’t jump up and down with joy, because your money are worth less now.

In the US, Spinsanity has touched on the topic and how the oil price has been used on the political arena.

A more critical approach from media would be healthy, like when Dagens Industri (reg. required) for example last week noted that if adjusted for inflation, the price in 1980 was more than twice what it is today. But these examples are very rare.

Check my previous post, and below, for stats and graphs for inflation adjusted oil prices.

Chart from Inflationdata.com. Full size chart here.