Oil prices are a critical component of the world's economies, with influences that span from employment trends to investment flows and beyond. Moreover, oil's value has a close impact on transportation and manufacturing costs. But, what drives the price of a barrel of crude?
The infographic below, created by our friends at Aspect Enterprise Solutions, provides a 360-degree overview of the factors that determine oil prices.
Some quick takeaways before you check out the oil price graphic below:
- The basic principals of supply and demand are a main driver in the oil market. But, remember, petroleum price changes tend to result from uneven production and consumption across the globe.
- Natural disasters and events can rattle the oil chain.
- The trade of oil futures -- paper contracts that value a barrel of crude -- has impacted prices since the early 1920s and money flow is a huge fundamental in this market.
- Geopolitics and OPEC decisions also contribute to volatility.