Current Oil Prices, Current Crude Oil, Heating Oil, Natural Gas, Propane Prices
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Current oil prices are influenced by the strength of the global economy. The economic crisis of 2008 has affected the current oil and natural gas prices, bringing them down considerably. The availability and price of crude oil have been the major causes for conflict between countries. Wars have been fought over oil barrels and the governance of oil rich regions.
The Impact of the 2008 Slowdown on Current Oil Prices
As per data collected by the Energy Information Administration (EIA), crude oil prices began surging since January 2008 and reached a record high of US$145 per barrel in July. The deepening of the financial crisis led to a steady decline in the price of crude oil and natural gas. From August, prices started plummeting, reaching a low of US$30 per barrel by December. Crude prices ranged between $35 and $40 for the next couple of months. Prices started recovering in February 2009 and rose to US$50 per barrel in March 2009, aided by the Fed’s intervention. To fuel the national economy, the Fed invested in debts backed by the US government. This led to the lowering of interest rates, attracting borrowers. That, in turn, resulted in increased spending and an upturn in the demand for goods and services. Ultimately, this spurred the demand for oil, causing a rise in its prices.
Other Factors Impacting Oil Prices
Other factors influencing current oil prices include:
The Organization of Petroleum Exporting Countries (OPEC), which includes Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE and Venezuela, has regular meetings to determine an increase or decrease in oil production. OPEC’s decision has a significant impact on oil prices.
Statistics offered by leading British oil company BP reveal that the global demand for oil has been more than the production capacity since 1981. Moreover, while production in most of the oil producing countries has been on a decline, demand has been on the rise. As a result, oil prices have a tendency to rise.
Short term speculation impacts the price of crude oil and natural gas futures. Margin deals allow greater funding, increasing the volatility.
Most of the oil deals across the world are carried out in US dollars. The devaluation of the US dollar exerts upward pressure on oil prices.
