Many touch $100 a barrel. In May,

Manyresearches have indicates that the fundamentals of demand and supply areimportant to understand the short run and long run fluctuations in oil market.The fluctuation studies are helpful for investors to decide which investment isprofitable and which is not. There are many other factors of fluctuation inprices of oil like increase indemand from developing countries,Currencyfluctuations-when there is an increase in US dollar it will be expensive for Indiato import oil thereby affecting its demand and price, many weather conditionsalso decides the prices and speculative buying and selling also OPEC being theproducer of 40% global oil also fluctuates the prices.

The point to note isthat the fluctuations in oil prices is not solely due to financial speculationsbut majorly due to oil demand and oil supply. Apart from these there are manydisturbances in the economy that causes the crude oil price to fluctuate, thesedisruptions are short-lived because as the production pattern changes aroundthe world the price also starts reacting accordingly. It was found that manyhistoric global events had a negative effect on oil prices which furtheraffected the production process in many countries. Some of the events were USSubprime crisis and the following global recession (2008) the crude oil pricefell from $101.

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84 a barrel to $41.34 abarrel (as shown in fig 1), The Arab Spring (2011-12) made the crude oil priceto touch $100 a barrel. In May, 2011 due to flooding of Mississippi River theoil prices fluctuated.

In 2014 OPEC vowed to keep crude oil price above $100 abarrel foresightening the future but in mid-2014, the price of oil began tofell from $100 a barrel to be touching $36 a barrel .The reason foravailability of cheap oil was OPEC as it did not allow to cut oil production asa result the prices started to dwindle. Even post demonetization and GST thecrude oil price recovery was sluggish.

Thus this historical global events havemajorly impacted the crude oil price, the recovery from which is stillcontinuing.


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