What Influences the Price of Crude Oil on the Market?


Quick Answer

The price of crude oil is influenced by supply and demand. The price riseS when there is an increase in demand or decrease in supply. As demand decreases and supply increases, price goes down.

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Full Answer

Market sentiments also influence oil price. A belief that oil prices may increase in the future can result in an increase in oil prices and vice versa. Change in demand is caused by hedgers and speculators in the oil futures market. A hedger buys oil futures to guard against potential rising prices while an oil speculator is someone who guesses the oil price direction and has no intention of actually buying the oil.

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