What is oil price?

The price of oil, or the oil price, generally refers to the spot price of a barrel (159 litres) of benchmark crude oil —a reference price for buyers and sellers of crude oil such as West Texas Intermediate (WTI), Brent Crude, Dubai Crude, OPEC Reference Basket, Tapis crude, Bonny Light, Urals oil, Isthmus, and Western Canadian Select (WCS).

How are oil prices determined?

Unlike most products, oil prices are not determined entirely by supply, demand, and market sentiment toward the physical product. Rather, supply, demand, and sentiment toward oil futures contracts, which are traded heavily by speculators, play a dominant role in price determination. Cyclical trends in the commodities market may also play a role.

What econometric models are used to forecast crude oil prices?

(According to the Chartered Alternative Investment Analyst Association, time-series econometric modeling is the most common forecasting method for crude oil prices.) Supply and demand models focus on macroeconomic variables, such as OPEC production, income elasticity of demand for oil and real gross domestic product (GDP).

What is the IEA's oil 2021 outlook?

Oil 2021, the IEA’s latest medium-term outlook, explains why. Rapid changes in behaviour from the pandemic and a stronger drive by governments towards a low-carbon future have caused a dramatic downward shift in expectations for oil demand over the next six years.