Joseph Mikrut: Increasing Domestic Oil Production

…Domestic exploration and production activity is affected by the world price of crude oil. Historically, world oil prices have fluctuated substantially. From 1970 to the early 1980s, there was a fivefold increase in real oil prices. World oil prices fell sharply in 1986 and were relatively more stable from 1986 through 1997. During that period, average refiner acquisition prices ranged from $14.91 to $23.59 in real 1992 dollars. In 1998, however, oil prices at the refiner declined to $12.52 per barrel in nominal dollars ($11.14 per barrel in 1992 dollars), their lowest level in 25 years in real terms. Since 1998, the decline has reversed with refiner acquisition costs (in nominal dollars) rising to $17.46 per barrel in 1999 and $30.92 per barrel in November 2000, the latest month for which composite figures are available. The equivalent prices in 1992 dollars are $15.31 per barrel in 1999 and $26.56 per barrel in November 2000.