Real Oil Price Up 7% in November 2013

In real dollars, the price of oil averaged $93.86 in November 2013. This is first time since June 2013 that the average monthly price of oil has fallen below $100. In fact, it is the lowest average price of oil for a month since April 2013. However, the price of oil was up 7% compared to November 2012. This is the sixth consecutive month that the month-over-month rate of change has grown. As a result, the annual rate of change grew for the first time since October 2012.

Real consumer spending is a good leading indicator for the real oil price. Real consumer spending has been growing at a slightly decelerating rate since 2012. Historically, this pattern of growth in real consumer spending has indicated accelerating growth in oil prices. This is a positive sign for oil, gas field, and mining machinery production.