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The prices on oil get affected by many global factors in the United States. In the 20th century, the United States government put restrictions on the amount of production and prices on oil in order to conserve such a valuable resource. After the Second World War, the United States started importing crude oil in order to meet demand as the in-house production was not enough and it couldn’t feed the increasing demand. Until 1972 war between Israel, Syria and Egypt, the global crude oil prices were somehow stable at $3 a barrel. Major oil producing countries started imprisoning an oil embargo, which led to increase in crude oil prices up to $12 a barrel. Subsequent to the Iran revolution of 1979 and Iraq-Iran war, the prices on crude increased to $35 a barrel by 1981. At the starting of 1986, the prices on oil dropped to $10 a barrel because of booming production by the OPEC members. Again, prices kept on increasing over the next decades, but crude oil prices dropped because of the 1998 South-East Asian economic crisis. The end of the 20th century showed an increase in oil prices up to $25 a barrel as a result of a number of many factors such as untimely war and reduction in supply. The prices on oil rose to $70 a barrel in 2005. The consumption of crude oil is increasing in the United States by maximising imported crude oil supplies. Crude oil futures trading at the New York Mercantile Exchange (NYMEX) drives the prices on oil in the United States. In the middle of 2006, the prices on light crude oil mounted up to $78.40 a barrel in the United States. During that time, some analysts predicted that prices on fuel will touch around $105 if increasing phase will persist for the long time. One big reason for rising prices on oil is due to mismatch between demand and supply. This imbalance occurs if crude refining capacities cannot cope up with increasing demand. To maintain prices on oil, it’s important to look for alternative sources of energy so that you can minimise dependence on non-conventional sources; in fact you should think about oil conservation and use it when needed as well prevent wastage of such an important resource. These all factors will help you control the prices on oil so that it doesn’t soar up. Expect stability in the prices on oil in upcoming days. Kyles Humphrey is an accomplished journalist in oil related fields, who regularly writes articles related to oil prices & indexes and crude oil including tips on investment in oil. Please visit oil.com for more details.
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