by Bill McBride on 1/13/2016 10:46:00 AM
Wednesday, January 13, 2016
One year ago today, I wrote Is Oil "Cheap"? Some people were arguing oil was "cheap" with Brent futures at $46 per barrel.
I pointed out that oil prices had still increased more than other key items since 1990 and 2000.
Below is an update to that table I posted comparing the change in headline CPI, Brent oil prices, Food, and Case-Shiller house prices since 1990 and 2000.
Things have changed now with Brent futures under $32 per barrel.
CPI is up 87% since 1990, but Brent is only up 51%.
Since 2000, CPI is up 41% and Brent is up 25%.
|Case-Shiller House Prices||127%||74%|
So, compared to 1990 and 2000 prices, maybe oil is now "cheap".
Note: This is another way of saying that in real terms - inflation adjusted - oil prices are now below prices in 1990 and 2000.