Records

Crude oil prices set another record yesterday at $93.80 per barrel. Of course, this is the highest dollar amount, but not an all-time record when you adjust for inflation. That's been made clear in practically every news article written since oil began to rise in earnest in 2003. For example:

Despite the gains, the price of oil is still below inflation-adjusted highs hit in early 1980.

That phrase, or one like it, has been repeated ad nauseum for the last three years in the business section of any paper worth its salt. For the last couple of years, the record was quoted at something like $92 per barrel. Now we've come to parsing exactly what the record price was back then. CBC News:

While Wednesday's price level does amount to a new all-time high, analysts point out that when inflation is taken into account, it falls short of record ground.

During the oil supply shock that followed the Iranian revolution in 1979, inflation-adjusted oil prices rose to about $100 US a barrel level in 2007 dollars.

Reuters really gets into it, with a table comparing historical annual averages, adjusted for inflation:

The following table from the BP Statistical Review picks out key moments in oil market history. It gives average annual dollar-denominated oil prices in money of the day and the equivalent price in 2006 money. Prices are in dollars a barrel.

(I'm too lazy to reproduce the table here—you'll have to click over.)

I'm not sure what difference it makes. Whatever the record, we're in the neighborhood of it right now and that should be telling us something. Unlike in the past, where one could cite a specific event like the the Arab embargo in 1973 or the Iranian Revolution in 1979, the current increase seems to have crept up on us over the course of several years.

What does that mean?