Oil may be treated as one of the most important commodities when it comes to economical activity, mainly because so many sectors depend on it.
The price of oil represents the value of one barrel in US dollars, with one barrel being equivalent to 159,6 litres.
Oil is very significant to the world economy. Industries rely on oil, or its derivatives, to power supply for machinery, transportation and others. On the other hand, it is significant for individual consumers, as the price of consumer goods depends also on the cost of transportation, which in turn is dictated by the price of fuel. In this respect oil has a significant impact on the whole economy, influencing the inflation rate and the purchase power of households.
Major oil producers are Russia, Saudi Arabia, the United States, Iran and China. On the other hand, among the top oil importers are the United States, Japan and countries of the euro zone. Rising oil prices provide a positive boost to the producers, but at the same time have a negative impact on the economical
conditions of importers.
Oil prices are not only related to the natural available supplies, but also to the general economic situation in the world. Any negative economic or political events, such as wars or strikes, may trigger a rise in the prices of oil.
Rule of thumb
Oil prices respond to reported supply levels from OPEC on a regular basis