The prices of oil can fluctuate by the day, by the hour, even by the minute. In the 1990s the demand for oil had been decreasing but the Organization of the Petroleum Exporting Countries (OPEC) continued to increase production.

At that time, the price of oil fell $14.30 per barrel in terms of today’s dollar. While in 1996, a strong economy in the US and a booming economy in Asia, led to an increase of 80 million barrels of oil from 63 million barrels a day.

Since the early 2000s, Chinese demand for oil has been growing. Its manufacturing as well as other industrial sectors have taken off with an increase in wealth among majority of the population has led to an increase in the demand for vehicles.

In response, OPEC has increased its production. At the same time the US production had been decreasing due to the aging of the oil fields.

Soon after the invasion of Iraq by the US, there was uncertainty regarding future supplies and an increased speculation on oil which led to a jump in prices.

The prices fell sharply in 2008 as the subprime mortgage crisis gripped US but they recovered in 2009 and 2010 after OPEC cut down its production. After that, the United states discovered shale oil.

Companies started investing in new technology which led to a surge in the production levels. Nonetheless, the prices remained high. In 2014 Libya and Iraq increased their production which resulted in a fall in the oil prices.

The OPEC members agreed not to slow down the production as they wanted to maintain their market share. This decision put a pressure on US companies.

There may have been a conspiracy to bring down the prices. Falling oil prices in the 1980s did help bring down the Soviet Union. Some oil experts have said that the Saudis want to hurt Russia and Iran and so does the US.

The sanctions which have been lifted in Iran have also contributed to a decrease in the oil price. Saudi Arabia, the largest oil producer among the OPEC countries, has said that the country will only cut its production by one million barrels per day next year if Iraq and Iran freeze their increasing production.

The chances of production freeze among the world’s largest producers have boosted global oil prices. If the OPEC members agree to cut production then the oil prices would stabilize.

Saudi Arabia, the world’s largest producer of oil, may suffer with this deal. It may lose its market share in the face of a worldwide glut.