Oil explainer: the key drivers that cause the oil price to move up and down

Prices for almost everything we buy and sell are dictated by supply and demand. Put simply, when supply exceeds demand, prices go down, and when demand exceeds supply, prices go up. 

It is no different on the oil markets, but prices there are heavily influenced by an oil cartel called Opec (Organisation of the Petroleum Exporting Countries). As at April 2020, it had 13 member states, including Saudi Arabia, Kuwait, Venezuela, Iran and Nigeria.

Where next for oil, gold and other metals in 2020?

This piece was written in December 2019.

If geopolitical developments had the effect on equity markets that’s so often feared, recent years might have been much more volatile. But while the investment implications of political and macroeconomic turbulence are frequently overestimated, their impact on commodity prices can be a different matter.

Long driven by the fundamentals of supply and demand, commodity markets are increasingly shaped by factors such as policy change, trade disputes, political tensions and the response to climate change concerns.

Oil price posts biggest ever spike

The price of oil saw its biggest intraday jump following attacks on several key Saudi Arabian oil processing facilities.

Over the weekend, Saudi Arabia's pivotal Abqaiq processing facility and Khurais oil field were attacked. In response, oil prices initially spiked by 20% when markets opened. Since then, the price has receded slightly, but prices are still around 10% up from the market’s open.

Commodities: will it be a strong 2019?

Commodity prices across the spectrum are down at least 20% from their 52-week highs, but could rebound sharply in 2019, if concern over slowing economic growth and the trade war between the US and China lifts.