As of 8:30 a.m. Eastern Time today, the price of oil per barrel was $99.84, with Brent serving as the benchmark (we’ll explain different benchmarks later in this article). This represents an increase of $1.08 compared to yesterday morning and is approximately $29.47 higher than the price one year ago.
Will oil prices go up?
It’s impossible to precisely forecast oil prices. Many different factors influence the market, but ultimately, it comes down to supply and demand. When concerns about economic recession, war, and other large – scale disruptions increase, the direction of oil prices can change rapidly.
How oil prices translate to gas pump prices
Gas prices at the pump don’t just follow the price of crude oil. They also include the costs of refining and transporting the fuel, the taxes imposed, and the additional markup added by your local gas station to stay in business.
Since crude oil generally accounts for the majority of the per – gallon cost, changes in its price have a significant impact. When oil prices surge, gas prices usually rise in tandem. However, when oil prices fall, gas prices often decline more slowly, a trend sometimes referred to as “rockets and feathers.”
The role of the U.S. Strategic Petroleum Reserve
In case of an emergency, the U.S. has a stockpile of crude oil known as the Strategic Petroleum Reserve. Its main purpose is to ensure energy security in the event of a disaster (such as sanctions, severe storm damage, or even war). It can also help mitigate severe price hikes during supply shocks.
It’s not a long – term solution and is mainly intended to provide temporary relief, assisting consumers and keeping crucial parts of the economy, such as key industries, emergency services, and public transportation, running.
How oil and natural gas prices are linked
Both oil and natural gas are important sources of the energy we use daily. Therefore, a significant change in oil prices can affect natural gas. For example, if oil prices increase, some industries may switch to natural gas for certain parts of their operations when possible, which increases the demand for natural gas.
Historical performance of oil
To assess oil’s performance, we often rely on two benchmarks:
- Brent crude oil, the main global oil benchmark.
- West Texas Intermediate (WTI), the main benchmark for North America
Among these two, Brent better reflects global oil performance because it prices a large portion of the world’s traded crude. It’s also often the best way to track the historical performance of oil. In fact, the U.S. Energy Information Administration now uses Brent as its primary reference in its Annual Energy Outlook.
Looking at the Brent benchmark over several decades, oil prices have been far from stable. They have spiked due to factors like wars and supply cuts, and have also crashed during global recessions and periods of oversupply (known as a “glut”). For example:
- In the early 1970s, the first major oil shock occurred when the Middle East cut exports and imposed an embargo on the U.S. and other countries during the Yom Kippur War.
- Prices dropped in the mid – 1980s due to factors such as lower demand and more non – OPEC oil producers entering the industry.
- Prices spiked again in 2008 due to increased global demand but soon plummeted during the global financial crisis.
- During the 2020 COVID lockdown, oil demand collapsed like never before, pushing prices below $20 per barrel.
In short, oil’s historical performance has been anything but smooth. It is greatly influenced by wars, recessions, OPEC decisions, evolving energy initiatives and policies, and many other factors.
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Frequently asked questions
How is the current price of oil per barrel actually determined?
The current price of oil per barrel largely depends on supply and demand, including news about potential future supply and demand (such as geopolitics and decisions made by OPEC+). In the U.S., prices also fluctuate based on how favorable an administration is to oil drilling, as it can affect future supply. For example, in 2025, the Trump administration moved to reopen more than 1.5 million acres in the Coastal Plain of the Arctic National Wildlife Refuge for oil and gas leasing, reversing the Biden administration’s policy of limiting oil drilling in the Arctic.
How often does the price of oil change during the day?
The price of oil is constantly updated when the “futures” markets are open. A futures market is essentially an auction where people agree to buy or sell oil in the future. As long as people and companies are trading contracts, the oil price is changing.
How does U.S. shale oil production affect the current price of oil?
In brief, shale is rock that contains oil and natural gas. Think of shale as untapped energy. The more shale the U.S. accesses, the more energy we’ll have, and it will be easier to prevent oil prices from spiking as much due to increased supply.
How does the current price of oil impact inflation and the broader economy?
When oil is expensive, it tends to make everyday items more costly. This can be related to energy (such as heating and gas utilities), but it’s also due to the logistics involved in making those items available to you. For example, shipping can affect the prices of items at the grocery store because it’s more expensive to transport products from warehouses and farms to the shelves.