The demand for oil is highly dependent on global macroeconomic conditions. Some economists say that high oil prices have a large negative impact on the global growth.

The Organization of the Petroleum Exporting Countries (OPEC) was formed to maintain the price of oil at a level most beneficial to its membership considered as a whole, and is considered to be a cartel by some observers.

History

Recent price history

Main: 2000s energy crisis

On January 2, 2008, a single trade was made at $100, but the price did not stay above $100 until late February.

However, oil prices declined by more than $20 over the next two weeks, settling around $125 a barrel on July 24, 2008, A strong contributor to this price decline was the drop in demand for oil in the US. Miles driven there in a month were down in March-May 2008 compared to 2007, with the 4% decline in May being the largest drop in history. Oil further dropped down to its lowest price in 3 months, at around $112 a barrel, on August 11,2008, and on September 15, oil price fell below $100 for the first time in seven months.

Future

Russian energy giant Gazprom meanwhile forecast that soaring oil prices would "very soon" hit 250 dollars a barrel.Fact: date=September 2008 OPEC's president predicted prices might reach $170 by the summer of 2008. Neither prediction came true.

Market listings

main: Commodities markets Oil is marketed among other products in commodities markets. See above for details. Widely traded oil futures, and related natural gas futures, include:

• PETROLEUM
• Nymex Crude Future
• Dated Brent Spot
• WTI Cushing Spot
• Nymex Heating Oil Future
• Nymex RBOB Gasoline Future
• NATURAL GAS
• Nymex Henry Hub Future
• Henry Hub Spot
• New York City Gate Spot

Speculation

The surge in oil prices in the past several years has led some experts to argue that at least some of the rise is due to speculation in the futures markets. This has led to an investigation, which reached an interim conclusion that speculation was largely not responsible for the rise. Economist James K. Galbraith believes that much of the rise is due to the "Enron loophole" drafted in a rider by former Texas senator Phil Gramm, which allowed energy futures to avoid CFTC oversight. Galbraith cites Masters, a hedge fund manager, who observes that index speculation tied to commodities by pension funds and other investment vehicles has risen from $13 billion in 2003 to $250 billion in 2008. Galbraith observes that with Goldman Sachs predicting a rise in the price to $200 and Gazprom $250, suppliers may react to the rise by restricting supply until they can sell their product at a higher price.