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Oil of great importance in our lives until it became impossible to give it up in order to be used by individuals on a daily basis. Who among us can imagine daily life without oil? If we are cataloging its uses are endless, both as a source of energy, a source of heating or as a main source of production and other .. but you ever wondered why oil prices tend to fluctuate much more compared to other investments? We will address in this article what are the factors affecting oil prices.
Crude oil prices is one of the most important indicators in the global economy, where governments and businesses tend to spend a lot of time and energy to find out where the price of oil is heading. If we want to simplify things we can say that the forces of supply and demand is one of the factors affecting oil prices directly. Such goods and other things in our daily lives, if it was up demand surged and vice versa if it increased the offer price decline.
It is determined by the supply of crude oil from the ability of oil companies to extract reserves of land and distributed all over the world. We point out that there are three main variables of view: technological changes, environmental factors, and the ability of oil companies to assemble and replenish capital. The technical improvements especially hydraulic fracturing and horizontal drilling significant impact on increasing the supply of oil. As for the demand for crude oil usually comes from individuals, companies and governments. In general, demand for oil tends to rise during the good economic times and to decline during bad economic times.
Of the most prominent factors affecting the oil prices, OPEC is an organization that has the ability to control prices by changing the production rates. OPEC, which is a collection of 13 state controls about 40% of oil supplies in the world. For example, the recent crisis in oil prices was the result of OPEC to maintain the same level of production despite falling demand in both Europe and China. This was the main reason for the low price is Kburleibulg more than half.
The cost of production is one of the most important factors affecting the price, If we want to compare the cost of oil production in the prices of exporters entirely different note that the cost of extracting oil in the Middle East are relatively cheap compared to other places such as Canada or the United States ... and the prices tend to rise if the Asttnzaf all sources of cheap oil is left not only the most expensive sources.
Finally, let's talk about the reasons unrelated directly to oil prices, which may affect prices significantly crises such as natural disasters and political instability. Throughout history, periods of war has seen a substantial increase in demand for oil in order to fear consumers of deteriorating economic conditions, which in turn led to higher prices dramatically and the best example of this is the rise in oil prices to US $ 136 per barrel in 2008 after winning the war time both Iraq and Afghanistan.
