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Oil Today Is Cheaper Than in 1970
By Paul Ausick March 6, 2015 1:20 pm EST
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In 1970 a barrel of crude oil averaged about $13 a barrel. Adjusted for inflation, that same barrel of oil should cost about $78 today. Instead, West Texas Intermediate (WTI) crude oil for April delivery traded at just under $50 a barrel in the noon hour on Friday.
With crude prices at multidecade lows, Saudi Arabia pushed its OPEC partners into adopting a policy of no production cuts and letting the market decide the winner. What Saudi oil minister Ali al-Naimi understands — and what many other oil industry experts fail to understand — is summed up in a question he asked at an OPEC conference in December 2014. In a paper by energy economist Philip Verleger, Naimi is quoted:
Read more: Oil Today Is Cheaper Than in 1970 - ExxonMobil Corp (NYSE:XOM) - 24/7 Wall St. http://247wallst.com/energy-economy/...#ixzz3ThdTWCLj
Follow us: @247wallst on Twitter | 247wallst on Facebook
By Paul Ausick March 6, 2015 1:20 pm EST
Print Email
inShare
4
In 1970 a barrel of crude oil averaged about $13 a barrel. Adjusted for inflation, that same barrel of oil should cost about $78 today. Instead, West Texas Intermediate (WTI) crude oil for April delivery traded at just under $50 a barrel in the noon hour on Friday.
With crude prices at multidecade lows, Saudi Arabia pushed its OPEC partners into adopting a policy of no production cuts and letting the market decide the winner. What Saudi oil minister Ali al-Naimi understands — and what many other oil industry experts fail to understand — is summed up in a question he asked at an OPEC conference in December 2014. In a paper by energy economist Philip Verleger, Naimi is quoted:
Read more: Oil Today Is Cheaper Than in 1970 - ExxonMobil Corp (NYSE:XOM) - 24/7 Wall St. http://247wallst.com/energy-economy/...#ixzz3ThdTWCLj
Follow us: @247wallst on Twitter | 247wallst on Facebook
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