Академический Документы
Профессиональный Документы
Культура Документы
Determined?
3 Important Factors That Determine Oil Prices
Oil prices are determined by commodities traders who bid on oil futures contracts in
the commodities market. These contracts are agreements to buy or sell oil at a specific
date in the future for an agreed-upon price. They are executed on the floor of
a commodity exchange by traders who are registered with the Commodities Futures
Trading Commission. Commodities have been traded for more than 100 years, and
have been regulated by the CFTC since the 1920s.
Ads
BabiesRUs Canada Official
www.babiesrus.ca/BreastPumps
Hand Or Electric? Single Or Double? View Our Video Breast Pump Guide!
Oil
Fuel Oil Delivery
Propane Delivery
Commodities traders fall into two categories. Most are representatives of companies
who actually use oil. They buy oil for delivery at a future date at the fixed price. That
way, they know the price of the oil, can plan for it financially, and therefore reduce
(or hedge) the risk to their corporations. Traders in the second category are actual
speculators. Their only motive is to make money from changes in the price of oil.
known as the Arab Spring. Oil prices rose above $100 a barrel in early March, reaching
its peak of $113 a barrel in late April.
The Arab Spring revolts lasted through the summer, and resulted in an overturn of
dictators in those countries. At first, commodities traders were worried that the Arab
Spring would disrupt oil supplies. However, as that didn't happen, the price of oil
returned to below $100 a barrel by mid-June.
Oil prices also increased $10 a barrel in July 2006 when the Israel-Lebanon war raised
fears of a potential threat of war with Iran. Oil rose from its target of $70 a barrel in May
to record-high of $77 a barrel by late July. For more, see Oil Price History.