Back to the new normal
Judging by history, and reflecting rampant supply, tepid demand and a passive Opec, $50 oil is about where the price belongs
It's time to stop muttering about the oil-price crash and time to stop talking about a recovery. The terms imply that oil prices should be higher. They shouldn't. A better term is the oil-price return or, to pluck from the economist's lexicon, the reversion to the mean. An oil price at $45-50 a barrel-its level since the beginning of September-is neither high nor low. It's pretty much normal. Between the Second World War and the end of 2014, the mean price of oil, adjusted for inflation, has been $41/b. Between 1974, the first full year to feel the impact of Opec power, and 2014, when Opec power vanished, the real price of oil has averaged $54/b. That historical range-$41-54/b-neatly coincid
Also in this section
15 May 2025
Financial problems, lack of exploration success and political dogma cause uncertainty across much of the region
14 May 2025
The invisible hand of the market has seen increasing transparency but much more needs to be done to build a better understanding
13 May 2025
A fall in Venezuelan output drives overall production lower, as Saudi Arabia starts to slowly bring more crude to the market
12 May 2025
With the gas industry’s staunchest advocates and opponents taking brutal blows, the sector looks like treading a path of insipid indifference
