While most of us tend to visualize current oil prices by the price we pay for a gallon of gasoline at the pump, what we may not understand is why the price fluctuates so much or why it has gotten so high in the first place. At one time we were all led to believe that overall world demand for all of the products manufactured from crude oil was the prime drive behind the rapid increase in the price of a barrel of crude oil we have all seen in the last few decades.

Most certainly there has been a significant increase in worldwide usage of products like gasoline and the many other products made from oil, but in countries like the US the demand for gasoline has been on the decline for several months and shows no signs of changing direction. The majority of the oil we buy from countries that are members of OPEC comes from wells that have been in production for years, the equipment has long been paid for, other than regular upkeep and replacement costs, these are certainly no reason for prices to spiral upwards either.

In the end it is because oil is considered by many to be a very safe investment that current crude oil prices are where they are. With more oil producing countries coming online and when you read the reports covering world oil supplies showing no shortage, there has to be reason that prices are still running as high as they are. Speculators make their living betting that the price of oil will continue to rise, with little to no real regulation on the international oil market, it becomes very easy to keep the price of crude artificially high.

As oil producing countries whisper about reducing production, the speculators turn this whisper into a roar as they start buying up the futures at current prices. They do this knowing full well that this will not only drive up futures prices, but will have an immediate and dramatic affect on current oil prices. Until regulations are put in place to reduce the damaging effects of such speculation, the overall price of every barrel of crude oil produced is likely to continue to rise and stay artificially high.

It is not that the world is any more or less dependent on this oil, more that we are afraid to put regulations in place to protect the consumer from the behavior of those who buy and sell this precious commodity in the open markets every minute of the business day.