What Affects Crude Oil Prices History
Michalis 'BIG Mike' Kotzakolios


Defined Tag: Crude Oil Prices History.

What comprises crude oil prices history? A composite of prices for 5, 10, 25, 50, or maybe even 100 years. In general, crude oil prices history can be used to track the volatility of prices over time; and to attempt to make inferences based on this. This is especially useful for businesses, traders, and individuals who want to forecast what is likely to happen in the future. Specifically, financial analysts and economists will look at the history of oil prices to try to draw out some type of usable information for forecasting; however, determining what future prices will be is not always simple, as there are many potential lurking variables that can affect crude oil prices.

The supply of crude oil is a major factor in crude oil price history. Current thinking indicates that there is a fixed amount of crude oil in the ground. Therefore it is more appropriate to discuss the amount of crude oil made available by oil producing nations. There have been times in history when some of the oil producing nations have decreased the amount of oil they supply on purpose. These actions are often in protest to an undesirable action or policy of another nation or group of nations. During these oil embargoes, the crude oil price historically rises.

Political unrest, tension, and wars affect the history of crude oil prices. This is especially true when major oil producing nations are involved in the disturbances. Sympathetic nations might voluntarily decrease their oil output in support of a country that may have been wronged in some way. Conflicts may disable or disrupt the ability of a nation to produce its maximum amount of oil. Elections of unpopular leaders in an oil producing country, or the threat of a coup in such countries, can also affect historical crude oil prices.

Another significant factor that affects the price of crude oil is the weather. Demand changes from season to season; and as demand increase, upward pressures move prices higher. Additionally, unexpected changes in weather, such as a colder than normal winter or a hotter than normal summer, can also increase the price of crude oil.

In many cases, oil producing countries will take cues from each other when setting the quantity produced (and, by extention, is market price). Some will do it explicitly, such as those who are members of OPEC. Others will do it explicitly; and others (on the competitive fringe) will oversell, taking advantage of the price set by artificial restriction of supply. All of these factors will play a part in determining crude oil prices history.