Oil Price Grows at Double Digit Rate for 4th Month
In real dollars, the price of oil averaged $106.29 in September 2013. This is the third month in a row that the real price of oil has averaged more than $104.00. The real price of oil was 10.9% higher than the real price of oil in September 2012. This is the fourth straight month of double digit month-over-month growth in the price of oil. That is the first time that has happened since April through July 2011. The annual rate of change has contracted at a slower rate each of the last five months. If the price of oil stays flat for the next two months, then the annual rate of change will become positive in November.
Real consumer spending is a good leading indicator for the real oil price. Real consumer spending has been growing at a relatively constant rate since 2012. This is likely to lead to stronger growth in oil prices in the short term. This is positive sign oil, gas field, and mining machinery production.
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