Welcome to ‘Normal’ Crude Oil Price, Trading at 100-Year Average

By Rakteem Katakey The theory goes that commodity prices move in “supercycles” or bursts of phenomenal surges, followed by longer, less-exciting periods. As such, a barrel of oil at is, well, normal. Many people think the oil price has crashed, but it has just gone back to its long-term historical trend, according to Ruchir Sharma at Morgan Stanley Investment Management Inc. That makes a barrel of oil at around just about right based on a 100-year inflation-adjusted average, said Sharma, who manages billion as head of emerging markets. “The price of oil is returning to normal in its long-term 100-year history,” Sharma said in an interview from New York. “We tend to have a short memory and we tend to forget that the price of oil breached the a barrel level only a decade ago.” Oil Prices Brent crude oil futures, which trade in London and are used as a benchmark to set prices for more than half of the world’s oil, reached a record of 9.83 a barrel on June 30, 2008, according to data compiled by Bloomberg. By Jan. 13, the price had plunged 67 percent to .59. “At times like these, it’s good … continue reading

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