Title: What Causes Oil Prices to Fluctuate?
Headings: What Causes Oil Prices to Fluctuate?
What Causes Oil Prices to Fluctuate?
Key Takeaways
OPEC Influences Prices
Supply and Demand Impact
The COVID-19 Demand Shock of 2020
Natural Disasters
Political Instability
Production Costs and Storage
Interest Rate Impact
Article Sources

Content: Key Takeaways
Oil prices are influenced by a variety of factors, particularly the decisions about output made by producers like the Organization of Petroleum Exporting Countries (OPEC), independent petro-states like Russia, and private oil-producing firms like ExxonMobil. Like any product, the laws of supply and demand influence prices. Natural disasters that could potentially disrupt production, and political unrest in oil-producing countries all impact pricing. Production costs influence prices, along with storage capacity. Although less impactful, the direction of interest rates can also influence the price of commodities. OPEC Influences Prices
OPEC, or the Organization of Petroleum Exporting Countries, is the main influencer of fluctuations in oil prices. OPEC is a consortium that, as of 2021, is made up of 13 countries: Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates, and Venezuela. 1 ﻿
According to 2018 statistics, OPEC controls almost 80% of the world's supply of oil reserves. 2 ﻿ The consortium sets production levels to meet global demand and can influence the price of oil and gas by increasing or decreasing production.