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At 9:30 AM ET today, oil was selling for $102.14 a barrel (as the Brent benchmark, which we’ll get to in a moment). That’s $3.05 less than yesterday — but up about $30 from last year.
Will the price of oil rise?
It is impossible to predict the future of oil prices. Several factors determine the movement of oil, but ultimately it depends on supply and demand. Again, when the threat of economic recession, war, etc. is high, the direction of oil can turn quickly.
How does the price of oil change to the prices of gas pumps
When you pay for gas at the pump, you’re paying for more than just the crude oil itself; you’re also looking for links along the chain, such as refineries and wholesalers – not to mention taxes and local gas station prices.
However, the crude oil aspect has the most dramatic impact on the final price, typically more than half the cost of a gallon. When the price of oil rises, so does the price of gas. And the frustrating thing is that when oil prices fall, gas prices tend to take their time drifting down (sometimes called « rockets and feathers »).
The role of the US Strategic Petroleum Reserve
In the event of an emergency, the United States has a crude oil reserve known as the Strategic Petroleum Reserve. Its primary purpose is energy security in case of disaster (think sanctions, severe storm damage, even war). But it can also go a long way toward cushioning crippling price spikes during supply disruptions.
It’s not a long-term answer – rather, immediate relief to help consumers and sustain critical parts of the economy like key industries, emergency services, public transport, etc.
How oil and natural gas prices are related
Oil and natural gas are both the most important energy fuels. A large change in the price of oil can affect natural gas more widely. For example, if the price of oil rises, some industries may switch to natural gas in some areas of their operations where possible, increasing the demand for natural gas.
Historical performance of oil
There are usually two main criteria when looking at oil performance:
- Brent crude oil is the world’s most important oil benchmark.
- West Texas Intermediate (WTI) is the most important benchmark in North America.
Between the two, Brent is a better representation of global oil performance because it prices a large portion of the world’s traded crude oil. And that’s often the best way to track oil’s historical performance. In fact, even the US Energy Information Administration now uses Brent as the primary reference in its annual energy review.
Looking at the Brent benchmark, over several decades, oil has been anything but stable. It has seen spikes due to factors such as wars and supply cuts, and it has also seen crashes due to global recessions and oversupply (called « oversupply »). For example:
- The early 1970s brought the first major oil shock, when the Middle East cut exports and embargoed the United States and others during the Yom Kippur War.
- Prices fell in the mid-1980s, for example, due to a drop in demand and an increase in non-OPEC oil producers.
- Prices rose again in 2008 as global demand increased, but soon collapsed with the global financial crisis.
- During the 2020 COVID shutdown, oil demand collapsed like never before – dropping prices below $20 a barrel.
All in all, the historical development of oil has been anything but smooth. Once again, wars, recession, OPEC studies, evolving energy initiatives and policies, and much more will greatly affect it.
Energy coverage from Luck
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Frequently asked questions
How is the current barrel price of oil actually determined?
The current price of oil per barrel depends largely on supply and demand, including news of potential future supply and demand (geopolitics, OPEC+ decisions, etc.). In the US, prices also vary depending on how friendly the administration is to drilling, as that can affect future supply. For example, in 2025, the Trump administration moved to reopen more than 1.5 million acres in the coastal plain of the Arctic National Wildlife Refuge to oil and gas leasing, reversing the Biden administration’s policy of limiting oil drilling in the Arctic.
How often does the price of oil change during the day?
The price of oil is constantly updated when the « futures market » is open. The futures market is practically an auction where people agree to buy or sell oil in the future. As long as people and companies trade, the price of oil will change.
How does US shale oil production affect the current price of oil?
In short, shale is rock that contains oil and natural gas. Think of shale as energy that is not yet being tapped. The more shale that comes to the US, the more energy we have – and the easier it is to keep the price of oil from rising as much due to the greater supply.
How does the current price of oil affect inflation and the wider economy?
When oil is expensive, it usually makes everyday goods more expensive. This may be related to energy (heating, gas plants, etc.), but it is also due to the logistics involved in getting these things available to you. For example, shipping can affect the prices of the goods in the grocery store, because it is more expensive to get the products from the warehouse and farm to the shelf.
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