Oil prices through time: a well-done graph

Wall Street Journal Oil prices

Source: Wall Street Journal

This image, shrunk 50% from it’s original size, is a very well-done statistical graph. It shows, in the pale green line, the inflation-adjusted price of a barrel of oil from 1975 to 2007. The blue line is the nominal price in dollars (which are “dollars at the time,” and obviously not adjusted for inflation).

This is exactly the way to present price data through time. The recent three-year surge in oil prices is remarkable, and more shocking using only the nominal data, but it also more misleading. The inflation-adjusted price is more honest and shows that we have reached these levels before.

The one major difference between the two peaks of today and of 1980 are the time it took to reach the peak. It took us three to four years of steady increase to reach the current levels. Back then, the rise was truly dramatic, taking place in just a little over a year. Of course, we do not know whether or not we are at the peak now.

The other good feature of this graph are the the bullet point at various interesting places. If you mouse over the original you can see explanations of the dates.

There are four other plots that accompany the oil-price chart. These are not so well done, especially the “Use vs. Population” charts. The idea is to show the per-capita use of oil per country. But nowhere are the actual per-capita figures printed, though the population size and oil use per day numbers are given (in separate locations). A map which attempts to show these figures is presented, but the legend is confusing and the map hard to read.

The graphs “The China Factor” and “Global Oil Picture” suffer from the common flaws associated with bar and pie charts, so I won’t go over them. The last chart, “The Biggest Users” does present the per-capita demand in a useful way, and also shows the change in this measure from the late 1990s to the current time. This part of the graph could use some help, and I’ll suggest some changes for it later.

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