With the sudden drop in oil prices only a few months ago, it’s hard to even begin predicting how crude oil prices will rise and fall in the coming years. Recently, the prices of oil have been in a constant uphill battle, with slight drops that are recovered from as soon as day after. Is that by itself a good enough reason to assume that oil prices will never go back to $20 price range like they did at the beginning of 2016? There are signs that the prices of oil will not only continue being stable, but rise enough to return some faith into the business for many oil rig companies who faced turbulent times with the drops this year. So why should we think that the oil industry is becoming more stable and not the other way around? Keep in mind that all of these signs are long-term games that require patience and anticipation; which is what the oil industry has always been about.

Increase in demand

While it may not look like it right now, the demand for oil and its derivate has been on an increase lately, with more and more average citizens buying and using motorized vehicles that demand this type of fuel. The oil industry has always been driven by supply and demand, nothing more and nothing less. The supply is currently unaffected and safely catered to. To such a point where some companies have trouble selling as fast as they produce.

The demand is on a steady rise and will continue to do so in the coming years. When and how exactly will the price of an oil barrel break even with the magic number of 100$ per barrel remains to be seen. Actions of many have always dictated the actions of few. One thing that is for sure is that people need oil more and more; even with recent advancements in clean energy and environment-aware consumption. Not everyone can afford to go green, but more and more people can and do afford themselves oil-fueled vehicles of transport.

Economic fluctuations

Given how every world currency has its own ups and downs just like oil; it’s easy to factor in how currency fluctuations would affect oil prices. US dollar became the number one currency not because of monopoly, but because of adaptability to global market and economy. When the US dollar fluctuates, so does the price of oil. With the increase in demand and more and more companies looking for their way into the business and their own slice of oily cake, once can see how economic fluctuation on the global scale would affect the price of oil.

Currency fluctuations are affected by numerous factors that are hard to anticipate and this is what makes it more exciting. We could be looking at severe rises (and drops) of oil prices that would affect the state of the industry in the long run. By taking smaller steps in ensuring that oil prices remain on an up rise by following the currency fluctuations, we can notice the pattern of rising prices for crude oil and it’s derivate.

Government interest

However much we’d like to see the oil prices rise and become competitive again, an important factor to consider in this equation is the interest that the government has in this game. Whether it’s the US, Russia, Middle East or a fourth factor, and the powers that be are the ones calling most of the shots. In the scenario that a sudden global event (like the constant clashes in the Middle East) would ensue, the governments can use these events to change the game table to whatever fits them the most; without us even realizing it.

These days, it’s all too easy to steer public perception of certain issues using a website that offers writing services. One or two articles in a right place can change the entire outcome of the oil market for a certain period of time and that’s just the tip of the proverbial iceberg of information manipulation. The fact is that whenever governments do take interest in shifting the market to their favor, they often do it without us even noticing. Often we end up blaming third-party factors for why our stock price has gone down (same goes for vice-versa).

Exploration, research & development

Even though oil is a limited and precious resource, not enough resources were invested into exploring and researching alternative sources of crude oil. Wells all over USA have gone dry and many of the companies have put the key in the lock and packed up their rigs, causing massive losses of employment for over a 250,000 workers in USA alone. Why does this happen? For one, exploration of new revenues of oil and researching new ways of exploiting this fuel source bear huge costs on whoever decides to take it upon themselves to break new ground. If that wasn’t enough, it could be years, sometimes never, that the invested resources make it worthwhile, and this is why many oil companies opt to drop out clean instead of getting their hands dirty and exploring. This is slowly beginning to change however, due to the simple fact stated in the first sentence.

Oil is a limited resource. We’ve just now begun researching ways of making it worth just a little more than before. Because once it’s gone, it’s gone. These breakthroughs could happen at any time, or they could happen years down the line. When they do, they’ll make the price of a single oil barrel skyrocket with the endless new ways of using this fuel source.

Geopolitical events

While the world has become smaller than it ever was, people have become more self-preservation oriented than ever before. This has become obvious on the geopolitical map of the world, where India and China are becoming economic powerhouses and Saudi Arabia is becoming a force to be reckoned with when it comes to oil export. A single geopolitical event, considering recent developments, will shake the very foundations of global economy as we know it, and oil, much like other trade currencies will fluctuate like never before.

The further we go into the future, the less new sources of oil we’ll find. It’s becoming less about digging up and refining oil to provide a better tomorrow for the world and more about trading and stockpiling barrels upon barrels of it to make profit. We live in a profit-driven global economy where every proverbial man will be for himself.

About author: Dante Munnis is a content manager and contributor on Essay Republic. In addition, he is a blogger who is writing on different topics from time to time.