price of oil and all that

[seafarer]

Here's an interesting little article about the "price" of things and how stuff is reported. Column by George F. Will.

http://www.msnbc.msn.com/id/9022907/site/newsweek/

{I've copied in some of it here:}


" For example, a recent headline in the Financial Times proclaimed: "New York investors take flight after price of oil hits record high." But the story's fifth paragraph read: "West Texas Intermediate for September delivery settled $1.83 higher at $64.90 a barrel—a new nominal record ..." The real meaning of the word "nominal" is: "The headline you just read is rubbish." As was the next day's page-one headline—"Oil price hits $66 for a fourth record of the week"—which was nullified by the story's first words: "Oil prices yesterday broke their fourth consecutive nominal record for the week ..."

For the price of oil—not in nominal dollars but real, inflation-adjusted dollars—to surpass the record set in January 1981, it would have to be $86.72 per barrel. Last Friday it was $65.35. For headlines about "record" gasoline prices to be accurate, a gallon would have to cost $3.12. Last week the national average reached $2.55—less, in real terms, than in March 1981, when the price in today's dollars was $3.11. Or, for that matter, in 1935, when the price was $2.67. Which explains one of the least mysterious "mysteries" of the moment—why, in spite of "sky-high oil prices" (Fox News) and "skyrocketing" gas prices (CNN), people are, according to AAA, driving more. "

Interesting, once inflation is taken into account when comparing one year to another.

The press can be alarmingly inaccurate.

[off_again]

Saw a news item the other day that actually asked the US public what they thought about the gas prices. Turned out that most were peeved about the prices, but actually didnt see it as a problem facing their household. In fact they saw politics, the economy and terrorism as much more important..... which is pretty obviously really.

So yes, its on everyone's lips, but to be honest most people arent that bothered - or at least not bothered enough to actually do anything about it - yet......

[wedg1e]

Tell you what, here in the UK we'd be happpy if petrol was (only) £3.11 a gallon, never mind $3.11...

[mcflurry]

Sorry IMHO that article is blx.

Inflation is caused in part by higher oil prices. That's like saying a car is a bargain because you save £2000, rather than it costs "only" £248,000 instead of £250,000...

[simpo two]

Odd that a few years ago when petrol got to 80p/litre there were strikes and protests. This time, at over 90p/litre, the great British public is just taking it up the ass without a whimper...

[Munter]

simpo two said:

Odd that a few years ago when petrol got to 80p/litre there were strikes and protests. This time, at over 90p/litre, the great British public is just taking it up the ass without a whimper...

Because the strikes etc made all difference!

[Mikey G]

simpo two said:

Odd that a few years ago when petrol got to 80p/litre there were strikes and protests. This time, at over 90p/litre, the great British public is just taking it up the ass without a whimper...

Because last time it was the farmers and hauliers that instigated the strikes, the 'public' cant do such a thing on there own without back up from industry. But the case now seems to be that the 'industry' is getting backhands in the form of rebates maybe?