Crude oil prices are one of the most closely followed commodities today, and they affect the global economy in numerous ways. Yet most people do not understand what drives crude oil prices and are not alone. Even economists, policy makers, and investors are often unsure how to predict or explain fluctuations in the price of crude oil. This article will help you understand what drives crude oil prices and how you can stay on top of these fluctuations to make educated decisions about your investments, business, and future.

Demand Drivers

It’s no secret that crude oil prices are volatile. But what drives these fluctuations? While there are many factors that can impact price, demand is one of the most important drivers. Here are a few things that can impact demand (and, consequently, price):

-Economic growth: When economies are growing, demand for oil increases as businesses and consumers use more energy.

Supply Drivers

The price of crude oil is affected by a variety of factors, most notably the levels of production and demand. When more crude oil is produced than there is demand for it, prices will fall. Similarly, when demand is higher than production, prices will rise. Additionally, geopolitical factors can play a role in crude oil prices. For example, if there is unrest in a major producing country, this can lead to higher prices.

Geopolitical Drivers

One of the most important drivers of crude oil prices is geopolitics. This encompasses a wide range of factors, including wars, embargoes, and production issues. For example, when tensions rise in the Middle East, it can lead to disruptions in oil production and shipping, which can cause prices to spike.


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