It is observed that more than a decade ago, crude oil prices were between $20 to $40/barrel with its ups and downs throughout the late 90s. The price went up slightly before dropping again after the 1997 Asian financial crisis. In the beginning of the 21st century however, the prices started to climb to almost double that to the average value of $40. Volatility is high as by 2002 the value dropped back to about $20 right after the September 11 Attacks before surging up again almost immediately. It can be said that from 2003 onwards, the price of crude oil throughout the world began to steadily ascend higher and higher over the few years till late 2006. This is mainly due to concerns on exhausting oil-wells throughout the world, the post US-Iraq war situation, OPEC’s stand on providing the world with limited supply with its reason to preserve resources, increasing growth and dependency on consumption of crude oil in the world and more. All of these add into the weight and urgency that spiked conspiracy and panic into the industry, added that market players took advantage of the situation to further propel prices into the sky.

By 2007, the bubble for the US Sub-prime loan crisis burst and sent a shock wave that affected cash flow in world economies with a shortage of funds. A temporary sharp drop occurred in the prices of crude oil. Within a period of just a year, speculators, players, investors and suppliers all contributed a part to the worst oil price hike in human history. The price of just an average of $60 per barrel more than doubled to an unbelievable peak of $140 or more per barrel. This has sent the world oil prices scrambling to readjust its value in the market and also affecting every other industry linked to it. As quickly as it came, the prices of crude oil crashed back to about $40 per barrel in less than half a year. The crash was timed, played and expected. However the damage has been done to the world economies affecting overall price increases and devaluation of currencies. The more dependent on crude oil a country is, the bigger the effect it has taken. In short, it is the citizens who suffer from these two back to back sub-prime loan and crude oil price hike crisis.

Home

From then since, the price of crude oil has lingered around $40 to $50 average for awhile as economies embrace recovery before the price of crude oil resumed its steep climb again. The climb hovered around $80 per barrel by early 2010. Up until recently, the price of crude oil continues to hang around $75. It is safe to assume that the 21st century modern crude oil prices would continue to be at least this value of $70 and above with the very simple reason of increasing demand with decreasing supply.