The barrel of oilHow 158.987295 liters can affect us.

Brief History

The measurement of an "oil barrel" originated in the early Pennsylvania oil fields. In the early 1860s, when oil production began, there was

no standard container for oil, so oil and petroleum products were stored and

transported in barrels of different shapes and sizes. Some of these barrels would originally have been used for other products, such as

beer, fish, molasses or turpentine.

Since then, the barrel of oil has been redefined to 158.987295 liters or 42 US Gallons.

Source: Wikipedia

Why is it important?

• The most obvious link would be the price of gasoline, or petrol.

• It can also affect a country’s currency

• The cost of crude oil generally counts for at least 50% of the price of gas observed

around in gas stations.

• Thus it is not surprising to notice a certain relation between those two

prices. However, it is important to note that the price of gas can move

independently from the price of crude oil.

Let’s expand

• One thing to keep in mind is that this diagram will not

always be true depending on the country.

• Eg: The tax percentage imposed may vary as well as

the distribution and marketing

• The price of crude oil still holds a good determining

factor.

What affects the price ?

• Supply and Demand

• Speculation due to current political event and changes in foreign policies

• Oil future market, specifically future contracts in which the buyer and seller are both obligated to fulfill the terms of their engagements.

• Unlike most products, oil prices are not determined entirely by supply, demand and market sentiment toward the physical product. Rather, supply, demand and sentiment toward oil futures contracts, and the current events in the world.

Price of oil from 1999 to 2015

• From 1999 til mid 2008, the price of oil rose significantly. It was explained by the rising oil demand in countries like China and India. In the middle of the financial crisis of 2007–2008, the price of oil underwent a significant decrease after the record peak of US$145 it reached in July 2008. On December 23, 2008, WTI crude oil spot price fell to US$30.28 a barrel, the lowest since the financial crisis of 2007–2010 began. The price sharply rebounded after the crisis and rose to US$82 a barrel in 2009.] On 31 January 2011, the Brent price hit $100 a barrel for the first time since October 2008, on concerns about the political unrest in Egypt.]

Your predictions

To be Continued…

• Sources:

• Wikipedia

• http://www.macrotrends.net/

• http://www.cnbc.com/