Review of Oil Price behaviour

At this time when oil prices have shown rapid increases it is appropriate to examine the trend and cyclic behaviour of oil prices to try and establish what the future might bring. In the last 60 years there have been three periods of sustained price increase separated by two periods of fluctuations without strong trends. The rapid increases have been in the 1940s, the 1970s and the 2000s. Each of these periods has been an era of an expensive sustained war for the USA which has lead to weakness in the currency, the same currency that is mostly used for oil price fixing. This alternation of stable and rising prices hints at a longer cycle of 30 to 36 years, but there are too few repetitions to draw any conclusions. If such a longer cycle existed, then the oil price could reach the vicinity of US$300 per barrel by 2014 before entering another stable period