80
Aftermarket Dynamics
1. Annual Average price of West Texas Intermediate Crude (WTIC)
Global oil prices as measured by WTIC averaged well under $20 a barrel during the 1990’s. Increased global demand, inflation,
and military conflict drove oil above $140 a barrel in 2008. A slowing global economy, enhanced fuel efficiencies, and use of new
technologies such as wind, solar, and especially hydraulic fracturing have increased the supply of electricity, oil and natural gas
especially in the United States. With WTIC just below $70 a barrel in April 2018, in the long run, higher oil prices seem a certainty.
Oil prices reached a recent low of just over $43 a barrel in 2016 and have increased more than 60 percent. Since this will present
challenging dynamics for the U.S. motor vehicle aftermarket.
Annual Average Price of WTIC (2000–2018)
Average High Low Average
$0
$20
$40
$60
$80
$100
$120
$140
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000
Low High
$27.40
$23.00 $22.81
$27.69
$50.04
$58.30
$64.20
$91.48
$53.56
$71.21
$87.04
$84.46
$89.84 $90.00
$51.00
$43.14
$51.47
$64.00
$37.41
2. Global GDP Growth
The U.S. economy has grown at a slower pace than the global average and certainly slower than China since 2000. The U.S.
economy has grown at an average rate of 3.2 percent since the end of World War II, yet grew at roughly 1.9 percent since the U.S.
economy began its recovery to the end of 2016. Many experts believe that an enlarged regulatory and tax burden over the last
decade is responsible for slowing growth in the United States relative to much of the world. Tax and regulatory cuts in 2017 and 2018
have most experts seeing GDP growth in the US economy of at least 2.5 percent in 2018.
Global GDP Growth (2001–2018) -5
0
5
10
15
2018 2016 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
2.7
8.3
0.9
1.8
2.8
3.8
3.4
2.7
1.8 1.8
2.8
1.9
1.5
2.2
-0.3
-2.8
3.4
3.8 4.9
4.7
5.3 5.2
3.1
-0.7
2.5
4.9
3.7
4.4
3.6
3.3 3.1
9.1
10 10.1
11.3
12.7
14.2
9.6
9.2
10.4
9.3
7.7 7.7
7.0
6.7
2.5
3.1
6.4
World China U.S.
Source: This summary was prepared by Dr. Timothy G. Nash, Senior Vice President and Director of the McNair Center for the Advancement of Free Enterprise and
Entrepreneurship at Northwood University.
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