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One of the largest drivers of the price of fuel is the price of crude oil. And as much as we love to predict what will happen with the price of oil, oil prices are constantly fluctuating. What drives the price?

Most predictably, oil prices are linked to the basic economic principle of supply and demand. When oil companies produce more barrels than demand calls for, oil prices drop and so do our fuel prices. However, if there’s a shortage in the supply of oil—less barrels produced in relation to barrels consumed—the price per barrel rises, as does the price of fuel.

Today, the oil market has seemingly reached a place of stability. As countries around the world agreed to cut production in line with the demand of fuel, prices steadily rose to their current levels (around the mid $50s per barrel). If the balance maintains, we can expect similar prices on fuel to maintain.

However, there are unpredictable factors that can shift the balance of supply and demand, and thus alter the price of oil and fuel. For instance, if production cut deals are not renewed, production may increase and cause an oversupply, dropping the price of oil. But if a catastrophic weather or political event hits a supply region—such as a hurricane, tornado, wildfire or sanction—supply may drop, lifting the price of fuel.

So, while we may predict oil prices across a half year, full year and years to come, such predictions are always barring unforeseen events that are, ultimately, out of the hands of those making the predictions.

If you wish to stay in the know on the oil market, we suggest keeping up with monthly updates from:

You can also search news articles for insights from analysts, such as Goldman Sachs.