As of 8:30 a.m. ET today, oil is trading at $110.69 per barrel, based on the Brent benchmark that we’ll explain in a moment. That’s 41 cents below yesterday morning’s rate—but about $35 more than last year.
Will the price of oil rise?
No one can predict exactly where oil prices will go. Many forces shape the market – but at its core, it’s still about supply and demand. When risks such as a potential recession or war escalate, oil prices can change quickly.
How do oil prices translate to gas pump prices?
When you buy gas at the pump, you pay more than the price of crude oil. You’re paying for every step of the process, including refiners, retailers, taxes, and grades that your gas station adds.
However, crude oil has a big impact on what you pay, often more than half a gallon. When oil prices rise, gas prices often rise with them. But when oil falls, gas prices tend to fall slowly—a process sometimes called “rockets and feathers.”
Part of the US Strategic Petroleum Reserve
In case of emergencies, the US maintains a supply of crude oil called the Strategic Petroleum Reserve. It exists mainly to protect energy security during calamities such as strikes, severe storm damage, and even war. It can also help lower the rate when property prices rise.
It is not intended to solve long-term problems. Instead, it provides immediate relief to consumers and helps keep important sectors of the economy running, such as key industries, emergency services and public transport.
How are the prices of oil and natural gas related?
Oil and natural gas are the world’s two main sources of energy. A large change in oil prices can affect natural gas in addition. For example, if oil prices rise, some industries may switch to natural gas for other parts of their operations where possible, increasing the demand for natural gas.
Historical performance of oil
When looking at how the oil works, there are two main factors:
- Brent crude oil is the largest amount of oil in the world.
- West Texas Intermediate (WTI) is the largest number in North America.
Of the two, Brent provides a better picture of the world’s oil performance because it accounts for a large portion of the world’s crude oil trade. It is also a place to trace the historical trends of oil. In fact, even the US Energy Information Administration now relies on Brent as its primary reference in its Annual Energy Outlook.
If you look at the Brent benchmark over several decades, oil has been far from stable. It has had highs associated with wars and supply shortages, as well as steep declines linked to recession and looting (called a “glut”). For example:
- The early 1970s provided the first major oil shock when the Middle East cut exports and imposed embargoes on the US and others during the Yom Kippur War.
- Prices fell in the mid-1980s due to low demand and an influx of non-OPEC oil producers entering the market.
- Prices rose again in 2008 as global demand grew, but collapsed with the global financial crisis.
- During the 2020 COVID shutdown, oil demand dropped to an all-time low – prices below $20 per barrel.
To sum up, the historical performance of oil has not been easy. Also, it is heavily influenced by wars, recession, OPEC’s opinion, changing energy policies, and many more.
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Frequently asked questions
How is the current price of oil per barrel actually determined?
The current price of oil per barrel is highly dependent on supply and demand, including issues related to supply and demand in the future (geopolitics, decisions made by OPEC+, etc.). In America, prices also move depending on how friendly the system is to drilling, as it can affect future supply. For example, 2025 saw the Trump administration reopen more than 1.5 million acres in the Arctic Coast National Wildlife Refuge for oil and gas leasing, reversing the Biden administration’s plan to limit Arctic oil drilling.
How often does the price of oil change during the day?
The price of oil is updated regularly when the “futures” markets are open. The futures market is an auction where people agree to buy or sell oil in the future. As long as people and companies are selling contracts, the price of oil is changing.
How does US shale oil production affect the current price of oil?
In short, shale is a rock that contains oil and natural gas. Think of shale as untapped energy. The more US access to shale, the more energy we’ll have – and oil prices can keep from rising too much due to oversupply.
How does the current price of oil affect inflation and the broader economy?
When oil is expensive, it tends to make everyday things more expensive. This can be related to energy (your heat, gas appliances, etc.), but it’s also because of the resources involved in getting those things to you. For example, shipping can affect the price of items at the grocery store, as it costs more to get those products from warehouses and farms to the shelf.
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