Oil Price Up 11.9% in June

In real dollars, the price of oil averaged $93.58 in June 2013. This was 11.9% higher than the real price of oil in June 2012. This was the first increase in the month-over-month change for the real oil price since October 2012. Also, this was the fastest rate of month-over-month growth since July 2011. Half way through the month of July the price of oil is climbing even higher. The month-over-month rate of change in July is likely to be similar to that of June. This is a dramatic and significant change in the trend of oil prices. Reasons for the upsurge in the price of oil include strength in consumer spending, continued quantitative easing by the Fed, and turmoil in Egypt. The trend in oil prices is a positive sign for the production of oil, gas field, and mining machinery.

We use the price of oil to forecast production of oil, gas field, and mining machinery.