Key Factors Of Recent Changes In Crude Oil Prices

Year 2016, Issue: 1, 90 - 95, 30.01.2016

Serdar Gürüzümcü Mehmet Apaydın

Abstract

As a well-known fact by millions
of people, more than hundred and fifty years ago, Colonel Drake in Titusville,
Pennsylvania did the first oil discovery. From 1859 to 2015, the use of oil and
its market concept has dramatically changed by producers and consumers. First
oligopoly market initiatives can be explained by the dissolution of the
Standard Oil with the accusation of illegal monopoly in 1911. Dissolution
served as an opportunity to the rise of the multi-national oil companies. Until
the 1970s, these large multi-national companies administrated crude oil prices.
Then, in 1973, the Arab-Israeli War began and the Organization of Petroleum
Exporter Countries (OPEC) had gained the control over crude oil prices. OPEC
brought the market-related pricing system, and still, it is widely used as the
main crude oil pricing mechanism. With the developments in prices and markets,
crude oil trading has become globally available for the access of traders at
any time.

Current oil market is more
complex, market fundamentals are never known with certainty and physical
dimension of oil has become important in pricing associated with static reserve
index (Fattouh, B., 2011). There are many factors that can be effective on
daily oil prices (benchmark prices) in different time periods. In this
analysis, economic, technological, and political factors were analyzed with the
current market conditions.

Keywords

Changes In Crude Oil Prices

References

• U.S. Energy Information Administration; accessible from http://www.eia.gov/ Trade Economics; accessible from http://www.tradingeconomics.com/united-states/currency MacroTrends; accessible from http://www.macrotrends.net/1335/dollar-gold-and-oil-chart-last-ten-years Fattouh, B., “An Anatomy of the Crude Oil Pricing System”, The Oxford Institute for Energy Studies, January 2011. International Energy Agency; accessible from http://www.iea.org/ Platts; accessible from http://www.platts.com/commodity/oil