Why are crude oil prices so high right now?

OPEC could be restricting oil supply, thus with lower supply =%26gt; higher prices...Why are crude oil prices so high right now?
From a historical perspective, gas prices acutually aren't that high. Over the last century overall real prices have been declining. Also if adjusted for inflation today's prices are still much lower than those experienced in the late 70s and early 80s.








References to the oil prices are usually either references to the spot price of either WTI/Light Crude as traded on the New York Mercantile Exchange (NYMEX) for delivery in Cushing, Oklahoma; or the price of Brent as traded on the Intercontinental Exchange (ICE, which the International Petroleum Exchange has been incorporated into) for delivery at Sullom Voe. The price of a barrel (which is 42 gallons) of oil is highly dependent on both its grade (which is determined by factors such as its specific gravity or API and its sulphur content) and location. The vast majority of oil will not be traded on an exchange but on an over-the-counter basis, typically with reference to a marker crude oil grade that is typically quoted via pricing agencies such as Argus Media Ltd and Platts. For example in Europe a particular grade of oil, say Fulmar, might be sold at a price of ';Brent plus US$0.25/barrel'; or as an intra-company transaction. IPE claim that 65% of traded oil is priced off their Brent benchmarks. Other important benchmarks include Dubai, Tapis, and the OPEC basket. The Energy Information Administration (EIA) uses the Imported Refiner Acquisition Cost, the weighted average cost of all oil imported into the US as their ';world oil price';.





Oil demand is highly dependent on global macroeconomic conditions, so this is also an important determinant of price. Some economists claim that high oil prices have a large negative impact on the global growth. This means that the relationship between the oil price and global growth is not particularly stable although a high oil price is often thought of as being a late cycle phenomenon.





OPEC, comprised of Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela, 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 most observers.








[edit] Price history


It has been suggested that this section be split into a new article entitled Price of oil. (Discuss)


A recent low point was reached in January 1999, after increased oil production from Iraq coincided with the Asian financial crisis, which reduced demand. The prices then rapidly increased, more than doubling by September 2000, then fell until the end of 2001 before steadily increasing, reaching US $40 to US $50 per barrel by September 2004. [2] In October 2004, light crude futures contracts on the NYMEX for November delivery exceeded US $53 per barrel and for December delivery exceeded US $55 per barrel. Crude oil prices surged to a record high above $60 a barrel in June 2005, sustaining a rally built on strong demand for gasoline and diesel and on concerns about refiners' ability to keep up. This trend continued into early August 2005, as NYMEX crude oil futures contracts surged past the $65 mark as consumers kept up the demand for gasoline despite its high price. (see Oil price increases of 2004-2006).) Crude oil futures peaked at a close of over $77 a barrel in July 2006, and in December 2006 at about $63. That is just about where they began the year 2006.[3]





Individuals can now trade crude oil through online trading sites margin account or their banks through structured products indexed on the Commodities markets.





See also History and Analysis of Crude Oil Prices, asymmetric price transmission, and Benchmark (crude oil)Why are crude oil prices so high right now?
Summer is on its way...oh...we are at war too.