  In April 2009, we introduced a model representing the evolution of motor fuel
price (a subcategory of the consumer price index of transportation) relative to
the overall CPI as a linear function of time. Under our framework, all price
deviations from the linear trend are transient and the price must promptly
return to the trend. Specifically, the model predicted that "the price for
motor fuel in the US will also grow by 50% by the end of 2009. Oil price is
expected to rise by ~50% as well, from its current value of ~$50 per barrel".
The behavior of actual price has shown that this prediction is accurate in both
amplitude and trajectory shape. Hence, one can conclude that the concept of
price decomposition into a short-term (oscillating) and long-term (linear
trend) components is valid. According to the model, the price of motor fuel and
crude oil will be falling to the level of $30 per barrel during the next 5 to 8
years.
