Zaks Investment Advisory Service

Energy Prices, 1946-2007

This document is a companion piece to our series on energy: resources, history, prices, alternatives and the future. The source of data on energy prices comes from the Energy Information Administration of the Department of Energy, and from the Federal Reserve of Saint Louis. Historical inflation data comes from the US Department of Labor.

The first chart represents historical oil prices in nominal dollars and in May, 2007 dollars (that is, adjusted for inflations). The all-time high of $101 in current dollars was reach in April 1980. Note the spikes during the Yom Kippur war of 1973 between Israel and the Arab countries, in 1979-80 during the US Embassy hostage crisis and the Iran-Iraq war, and the Kuwait crisis and Gulf War of 1990-1991. The 30-year low of $14.25/bbl (in current prices) was reached in December of 1998.

The following chart represents natural gas prices from 1946 through May 2007. Prices are in dollars for million BTU in nominal prices and current dollars (as of May, 2005). The spikes at the end of 2005 are due to hurricanes Katrina and Rita.

The chart below is of coal prices since 1949. Prices are in dollars per Short Ton (2,000 pounds or 907 kilograms). Coal prices vary greatly: by region, from the lowest in the Power River Basin of Montana and Wyoming, to the highest in the Central Appalachian region; and by quality, from lignite, the lowest, to anthracite, the highest. Data is averaged for the US by the Energy Information Administration. Note that the peak for coal prices was reached in 1975 and that prices now are less than one-third of that level.

The chart below represents relative price performances of oil, natural gas, and coal in current (May 2007) prices. For oil and natural gas, prices on January 1946 were set to 1. For coal, prices were set to 1 in 1949. Notice that prices on natural gas went up more than 11 times during the period, whereas oil went up just over 4 times. Coal prices have declined.