Mon Oct 29th, 2007 at 02:49:43 PM EST
In the past few weeks, there has been a simultaneous Euro and oil price rally. So, the popular claim emerged that maybe the oil price rally is in reality just due to the falling dollar.
This has already been rejected by a number of bloggers who actually checked the numbers: crude prices increase faster. But, after it came up again in Jérôme's Meanwhile... story, I thought for future reference, I collect the actual data, and generate oil price in Euros diagrams. I show four below the fold.
Update [2007-10-29 14:49:43 by DoDo]: Now back to 1971 with Euro pegged to D-Mark, and a fifth diagram showing inflation-corrected diagrams.
The data I used:
The data is of course only for weekdays. For a steady progress of data (apart from from Friday to Monday jumps), for holidays on weekdays I copied the data for the prior workday.
So here is the diagram of the full dataset, i.e. from the beginning of 1971 until the end of last week. This contains the first and second Oil Shock, the seventies fall of the Dollar, the 1985 dollar high and oil low, the invasion of Kuweit shock and the early nineties ECU and DEM highs, and the Dubya Era. Before 1999, there are two lines: one where I pegged the Euro 1:1 to its nominal predecessor, the virtual currency ECU, and a second where I pegged it to its most important real predecessor, the German Mark, with the constant 1€ = 1,95583DEM rate.
Below oil prices only during the lifetime of the Euro. This covers the Euro low in the summer of 2001, too. Price development in Euros is more moderate (we passed the August 2006 highs only with the October rally), but the trend is the same.
In Jérôme's latest story, I quoted an article where a journalist just stopped short of saying that analysts' predictions aren't better than tossing coins:
OPEC crude-oil supply will probably increase 1.6 percent this month in advance of the group's pledge to raise supplies beginning in November, PetroLogistics Ltd., a Geneva consulting firm, said. Gasoline demand in the U.S. averaged 9.2 million barrels a day in the four weeks ended Oct. 19, down 0.2 percent from a year earlier, the Energy Department said Oct. 24.
Respondents have predicted price drops in the previous 15 weeks. Prices have declined in five of those weeks. The oil survey has correctly predicted the direction of prices 53 percent of the time since the survey's introduction.
Bloomberg's survey of oil analysts and traders, conducted each Thursday, asks for an assessment of whether crude oil futures are likely to rise, fall or remain neutral in the coming week. The results were:
RISE NEUTRAL FALL
18 4 21
To contact the reporter on this story: Mark Shenk in New York at firstname.lastname@example.org .
So let's look at the 15 weeks ending with last week, first at the money values, then the percentage changes from the start of the period:
For more graphs of oil prices from 2006, in a greater variety of world currencies, check this Oil Drum story.
Update [2007-10-29 14:49:43 by DoDo]: I generated an inflation-corrected version of the diagram, using the following data: