The Crude Oil Price Roller Coaster

July 21, 2009 - PRLog -- Over the last year, crude oil prices have been on an economic roller coaster ride. It is not remarkable for prices to fall up to $10 or more in a single month. In fact, at its peak, the price was over $145 per barrel, and $33 at its lowest. If you remember paying more than twice as much to fill up your automobile or SUV gas tank, you were not mistaken. When the recession became more widespread, the price of crude oil fell, as did the price of gasoline. According to AAA, a leading automobile organization, oil has risen over 50 percent in just this past year.

Such fluctuations are fueled by many different factors, such as the economic situation of the world, a rise in unemployment, and basic supply and demand. The media also plays a huge role in the movement of crude oil price. For example on July 15, 2009, the price of oil increased due to a wall street surge, as well as a report from the government which stated that the supply of crude oil was at a lower level than had been anticipated.

“To call this extreme volatility might be an understatement,” stated Laura Wright, the chief financial officer of Southwest Airlines. “Over the past 15 to 18 months, this has been unprecedented. I don’t think it can be easily rationalized.”

As investors from other countries obtain more strength to buy due to the decline of the dollar, the price of oil will tend to rise. At the same time, speculators seem to feel crude oil is a place of refuge, far away from the dangers of inflation. They believe the price of oil will rise as our economy gets better.


According to a recent report by the Energy Information Administration, the oil supply of our country tumbled by nearly 3 million barrels just last week. The extreme fluctuations have had a widespread economic effect. A contributing factor to the downfall of GM was the decline in sales of SUV's and similar modes of transportation. Additionally, a number of airline companies are expected to lose a large amount of money because of higher jet fuel prices.


Even in the midst of this steep decline, America is in no danger of having an oil shortage. The U.S. has a supply of over 300 million barrels in its inventory. There are many powerful companies who are keeping a watchful eye on crude oil price because it affects their profits greatly. Only time will tell where this gas roller coaster leads. One thing I know for sure is that nobody knows whether it is going up or down.

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