This article explores the key factors influencing crude oil prices, including global supply-demand economics, OPEC's role, geopolitical impacts, and futures trading. It highlights how supply stability and market fluctuations shape energy markets, emphasizing the importance of understanding these dynamics for investors and industry stakeholders.

The valuation of crude oil is primarily driven by worldwide supply and demand dynamics. Economic growth tends to increase energy consumption, with petroleum products making up roughly one-third of global energy usage—they are produced from crude oil and hydrocarbons. Seasonal shifts affect both market demand and pricing levels. The Organization of the Petroleum Exporting Countries (OPEC) significantly influences prices through its production quotas, affecting both current and future market conditions. Countries like Saudi Arabia hold substantial reserves—73% of OPEC's total and 44% of global output in 2016—shaping global supply. Key factors include consumer dependence on oil, non-OPEC activity, and supply availability. OPEC's spare capacity helps stabilize markets during disruptions. Geopolitical tensions and extreme weather can cause supply interruptions, leading to price swings. Crude oil trading resembles a global auction, where supply and demand determine prices. Futures contracts, some lasting up to nine years, enable producers and buyers to hedge risks, allowing investors to evaluate potential profits based on market expectations.