Brent Jan13.pngCrude oil prices remained at a record level for the second year running in 2012. As the chart shows, Brent prices averaged $112/bbl versus $111/bbl in 2011 (blue line). By comparison, 2008 averaged $97/bbl, or $102 if adjusted for inflation (red):

• 2008 still holds the record for the highest-ever daily price at $144/bbl on 3 July
• It also holds the record for the 2 highest quarters – $127/bbl in Q2; $120/bbl in Q3

But until 2011, we had never seen prices sustained at over $100/bbl for a full year. And we have certainly never had to suffer them at this level for 2 years in a row.

Equally, as the pink columns show, every period of oil prices above $50/bbl on an inflation adjusted basis has led to recession. So either ‘this time is different’. Or, recession is waiting around the corner. It would be a brave company who ignored this risk, and simply assumed that high oil prices no longer matter to the global economy.