The annual average oil price of global benchmark Brent crude for 2011 is poised to be the highest (in both real and nominal terms) since 1860, the year after the birth of the modern oil industry in Titusville, Pennsylvania, according to a new IHS Cambridge Energy Research Associates (IHS CERA) analysis. Growing demand amidst supply concerns and rising production costs are sustaining prices at record levels.
The annual average price of Brent crude so far this year is well above its previous high of about $97 (and constant dollar terms of about $99) in 2008. IHS CERA expects Brent to average about $111 for the year at the end of 2011.
“Brent crude prices are approaching their highest annual average, a level higher than the peaks recorded by other widely accepted benchmarks going back to Colonel Drake and the origins of the modern petroleum industry in Pennsylvania more than a century and a half ago,” IHS CERA Chairman and Author of The Quest, Daniel Yergin said. “Quite simply, we are looking at the highest average price since the age of oil began.”
