Oil Price History
Similar to other goods’ prices, crude oil prices undergo major fluctuations during surfeit or dearth of crude oil. This particular product’s price cycle can span over many years, reacting to both demand variations and non- OPEC (Organization of the Petroleum Exporting Countries) and OPEC supply. Through most of the course of the last century, American petroleum rates were governed largely by price or manufacturing controls. The period following the Second World War saw wellhead oil rates averaging 28.52 dollars for every barrel (when adjusted to $2010 for inflation). Without any price control in place, American oil rates would have ended up tracking the global average of approximately 30.54 dollars. In this very age, the median adjusted global and domestic crude oil rate stood at 20.53 dollars in 2010 rates. After adjustment for inflation, oil rates only surpassed 20.53 dollars a barrel half the time between 1947 and 2010 (Williams, 2011).
The tumultuous 155- year history of oil prices (Holodny, 2016)
Relation between Oil Price and US Dollar Price
Increase in dollar strength largely contributes to decreased oil rates. As the oil market traditionally operates in dollars, oil rates will most probably drop with increased dollar strength. Therefore, oil sector firms have been furnishing the present decade’s worst outcomes because of plummeting oil rates. Several factors are known to impact dollar strength; further, successively,...
References
Donahue, C. (2016). Oil Prices and a Stronger Dollar: Causation or Correlation? Merrimack Honors Program ScholarlyWorks.
Holodny, E. (2016, December 20). The tumultuous 155-year history of oil prices. Retrieved from Business Insider: http://www.businessinsider.in/TIMELINE-The-tumultuous-155-year-history-of-oil-prices/articleshow/56088176.cms
Kun Sek, S., Qi Teo, X., & Nee Wong, Y. (2015). A Comparative Study on the Effects of Oil Price Changes on Inflation. 4th World Conference on Business, Economics and Management, WCBEM (pp. 630 - 636). Malaysia: Procedia & El Sevier.
Nwanna, I., & Eyedahi, A. (2016). Impact of Crude Oil Price Volatility on Economic Growth. IOSR Journal of Business and Management (IOSR-JBM), 10 - 19.
Williams, J. (2011). Oil Price History and Analysis. Retrieved from WTRG: http://www.wtrg.com/prices.htm
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The member nations of OPEC are relatively few, making it easier for them to form a producing conglomerate; the idea of a consumer conglomerate is untenable, as OPEC will always be able to find an extensive enough market for its commodity with other countries not in this conglomerate, and thus they can still control the price. Conclusion The oil industry is not fueled by supply or demand so much as it
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