The History Of The Price Of Oil Futures

Oil futures prices can give you an immediate picture of the cost of energy. By reviewing the history of the price of oil futures you can see how the cost of energy has changed over time. You can use your knowledge of historical prices in oil futures to gauge where the economy is headed.

The current price of oil futures is quoted on websites, in newspapers, and on major financial channels. The United States consumes approximately 20 million barrels of oil every day.

When oil is priced at 100 dollars per barrel, that accounts for $2billion in trading activity even before the oil is turned into chemicals, heating oil, diesel fuel and gasoline.

History Of The Price Of Oil Futures 1980-1990

The history of the price of oil futures begins with crude oil at $30.50 per barrel. This occurred halfway through President Ronald Reagan’s first presidential term. During this time, oil continued to be priced between $25 to $30 until the end of 1985. Oil futures contract dropped below $20 per barrel in early 1986, and did not move permanently above $20 again until the middle of the 1990s.

Oil traded below $15 during this time frame, which was a significant amount of time. Consumers and investors saw the low price of $11.11 in July of 1986.

There was a spike in the oil futures that started in August 1990 with the beginning of the first Gulf War. In approximately 10 weeks the price went from around $20 up to over $39 per barrel.

This spike in price was brief, and by February of 1991 oil futures were back below $20. The rest of the 1990′s saw oil that stayed mostly around $20 per barrel. The price fell back below $15 for a few months in 1998 and oil futures closed out at $26.31 in 1999.

History Of The Price Of Oil Futures The 21st Century

Until early 2004, oil futures stayed in the range of $25 to $35 per barrel. In May of 2004, the $40 level was first breached and this marked the start of a record setting price climb that peaked in May of 2008.

On July 3, 2008 the oil futures contract peaked at $145.29. At this point, the bubble burst in oil prices and the price of oil futures was back under $100 by October. Christmas 2008 saw the oil futures under $40 per barrel.

In 2009 the oil futures steadily climbed back up to $75 and the first nine months of 2010 saw the futures in a trading range of $70 into the low $80′s.

When you understand the history of the price of oil futures you can better understand the direction of the economy, as high gas and oil prices translates directly to the costs of commodities, as well as affects the costs of goods and services.

As you can see from reviewing the historical prices of oil futures, these investment instruments can be highly volatile, and are not suited for every investor. Consult with a professional financial adviser, such as the Chartered Investment Experts at online brokerage ETrade, to find out if oil futures are right for you.

You may also like:

  1. The History Of Oil Futures Trading In The US
  2. Think You Know Where Crude Oil Is Headed? Try Oil Futures Options
  3. How To Invest In Oil Futures
  4. Hedging With Futures And Options; Your Plan To Insure Your Portfolio
  5. Futures Vs Options: Which Is Best For Your Portfolio

Leave a comment