Week 25, 2012: Oil Prices

Summary: Brent Crude Oil prices dropped below $90 per barrel yesterday for the first time in well over a year, but are unlikely to stay low for long.

What does the chart show? The chart shows the price per barrel of Brent Crude Oil in US dollars at the close of trading each day for the past year.

Why is the chart interesting? Before the beginning of this month, the price of a barrel of oil fell below the $100 dollar mark only once, in September.  This week it crossed another landmark as the price closed at $89.20 yesterday for the first time in 18 months.  The price of oil has a big impact on costs around the world, and one would expect these low prices to feed through into inflation figures.  The apparent cause of the low price is record levels of production in Saudi Arabia (roughly 10m barrels a day), but they are likely to hold back their supply in response to the recent price drop, so don't expect oil prices to stay low for long!