Who determines the crude oil price?

Capitalistic markets have laws, determining the value (price) of a commodity:


Quantity - Supply and Demand (You try to get as much money for your commodity as the market will bear)


Quality - (only few countries can deliver sweet light crude, most oil today is dirty heavy oil, costing more to extract)


Transportation - to bring commodity from A to B


Distribution - all the middleman want to add a profit to final price


Speculation - Future outlook of above


Government - Taxes





And for the individual country, the value of the currency.





Its very complicated and I am dazzled by the naive answers you got so far.Who determines the crude oil price?
No one. The market determines the price. Its simple supply and demand. Recall that 60-70% of all oil reserves are in the hands of OPEC nations and state owned oil companies. Cartels are illegal in the US, but nothing anyone can do about their formation world wide.





More demand for the same oil means the price increases. With the price increasing, there is also speculation occurring which can increase the price even more. And open drilling in ANWR or off the coast of Florida and California won't make a dent in the price of oil.





High oil prices are here to stay - get use to it.Who determines the crude oil price?
Well, it's not specifically U.S.A. They're just pert of the reason.





In this type of business, the prices are specified by how many people are trying hard to get the product. As for oil, China and India need huge amount of it, and they are paying unimaginable prices for it, so it's like an auction, China and India are giving large numbers to buy the oil for they necessarily need it. Therefore, other countries have to pay very high prices to get the oil, so the prices increase as the need for oil increases!!!





The blame is on the users too, because they still buy the oil even if it's too expensive, therefore the oil producers just keep increasing the prices. So if we start lowering the need of oil and using solar power or something like that, oil producers would have to lower there prices to get people to buy it!!!
I am playing very big on oil trading, from Morgan Stanly, Goldman %26amp; Sachs on the Wall Street .





I bought millions and millions of barrels of oil when they cost $60--$100 a barrel. I expect to make a kill when I sell. But right now it’s only $145 a barrel. So here is my difficulty:





I already requested my agents spin the media, like: “Oil future looks high, expecting to be in the range of $200 a barrel soon. ” But it does not work price up as fast as I expected.





I have also demanded my agent playing “China demand high” blaming game.





I am glad to see that Congress is ignoring 19 top trade group’s letter demanding an end to rampant oil speculation





Also I am happy to see that the Media did not report it as I desired.





But how do I corner the oil future price up very fast ? fast enough in time so not to get caught ?
It not OPEC


prices are determined on international exchanges based on what traders are willing to pay. and i think the traders are hedge funds, investment banks, and others out to make a quick buck speculating on the price of oil. And while they're making money, the rest of us are paying for it. and that way the oil price is going up
As much as I loved Andrewch..'s answer, I have to respectfully disagree.





The price for any commodity is determined by those who trade it, and the relative strength of the currency that it is traded in... The falling dollar and speculative investing in oil are not the primary cause of the increase, they are the ONLY cause of the increase.





The price of oil has only slightly increased against the Euro and Pound Sterling... at the same time, the dollar has considerably fallen in value against those same currencies. Oil is bound to increase when the dollar drops if all other things remain constant.





All supply/demand arguments are voided when you consider that there is enough supply to meet demand. China and India are getting enough oil, and so is the US... when was the last time you heard of a refinery shutting in because they weren't getting any oil?





Then there are those who talk about refining capacity - another falacious argument... if there wasn't enough refining capacity, then that would mean that there would be a shortage of gasoline... since there is no shortage of gasoline, the answer must not be refining capacity.





Apply some common sense and ignore the partisan banner waving and you can get to the bottom of this very easily.





Here's a decent article from the NY Times that was written a little less than a month ago on this topic:


http://www.nytimes.com/2008/06/13/busine…
The market.


You, me and everyone like us, including governments who buy and sell oil on a regular basis.


Retail traders like you and me can buy and sell if you have a commodity account with a broker





And More than 30% of the oil produced is consumed by ONE country alone. The US- The Big Brother. They consume so much oil and release the maximum amount of gases and they have still not signed the Kyoto protocol.


Apart from their consumption, they also have political leverage over many oil producing countries.


This consumption does not even come close to what India and china consume combined having the population of more than a billion people each constituting a major chunk of the worlds population. Maybe its time the US allows developing nations to develop
American bleeding heart liberals who refuse to cut off middle-eastern food and water supplies until the prices come down again.
USA