Moments Move Crude Oil Prices

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When moments move crude oil prices

Since the late 1980s, a series of seismic global events have impacted the price of oil. From the Iran/Iraq war, through to the 9/11 tragedy, the global financial crisis, and more recently, interventions from US president Donald Trump.

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1989

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143

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Crude Oil Brent - Cash

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1990

Iraq invades Kuwait

Operation Desert Storm begins, prompting a rise in oil prices over supply fears. Iraq accused Kuwait of stealing its petroleum through slant drilling, though it was more likely that, due to an inability to repay Iran war debts to Kuwait, Saddam Hussein chose to get the debt written off by invading the country instead. Iraq also resented the way Kuwait contrived to hold down oil prices, making it difficult to generate funds to repay the $14bn owed. Oil surged from $18 a barrel to $39 by the end of 1990, before sliding back below $20 by mid-1991.

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2001-2003

BRIC economies fuel price rise

A combination of the 9/11 terror attack, the beginning of the Iraq war and rising demand sends oil prices higher. The west’s reaction to the terror attacks, which culminated in the 2003 invasion of Iraq, nudged prices up, but it took several years before they moved above the $35 peaks at the end of 2000. Prices were propelled upwards by a weaker US dollar coupled with rising global demand, triggered by the emerging BRIC economies of Brazil, Russia, India and China.

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2008

Financial crisis hits demand

Oil prices plunged from $147 in July 2008 to just $33 in February 2009, as the global financial crisis hit demand for fuel. The rise in oil prices in the period leading up to 2008 was driven by a number of different factors, including a weaker US dollar, and geopolitical tensions in the Middle East, Africa and North Korea. A lifting of a ban on US offshore oil drilling in the summer of 2008, followed by the collapse of Lehman Brothers in the autumn, prompted prices to suddenly go into steep decline.

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2009

US Fed initiates economic growth

A large-scale US quantitative easing programme, coupled with low interest rates, helps spur economic growth, sending oil prices sharply higher. The slashing of US interest rates, alongside the Federal Reserve’s large-scale stimulus programme, helped put a base under oil prices. The US dollar slid sharply, generating an inflationary impulse into the rest of the global economy as Fed chair Ben Bernanke strove to float the US economy off the rocks of a possible depression.

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2011

Arab Spring propels oil higher

The anti-government Arab Spring demonstrations bring further disruption to oil output, creating price volatility over supply fears. The Arab spring of 2011 pushed oil prices back above $100 a barrel, while also helping US shale producers who got wiped out in the crash of 2008 reorientate their business models to become more efficient. A pickup in Chinese demand also helped boost prices, as Chinese authorities implemented a host of stimulus measures in order to prevent a slowdown in its economy.

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2018

Trump prompts volatility

President Trump announces a renewal of sanctions on Iran, leading oil prices to rise to a three-year high of $85 a barrel. The spike to $85 was short-lived though as Trump subsequently railed against the jump in prices, as the US granted a number of exemptions to the sanctions. This prompted Saudi and the US to ramp up production – as prices slumped by 30% in Q4. The increase in production coincided with a rising US dollar and sharp slowdown in demand from China, Japan and Europe, as concerns about the health of the global economy returned.

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*143 awards globally 2013-2017.

**Based on figures from CMC Markets' 2017-18 annual report.

^Awarded Best Mobile Phone/Tablet App, based on highest user satisfaction among spread betters, CFD and FX traders, Investment Trends 2018 UK Leverage Trading Report.

The charts above are for illustrative purposes only. Past performance is not indicative of future results.

Source: independent.co.uk, 6 December 2016, marketwatch.com, 7 December 2016; The Guardian, 12 December 2016; CNBC, 25 April 2017; mediaite.com, 5 January 2017; marketwatch.com, 2 April 2018; Bloomberg, 23 August 2018.

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Take a better position

Join 60,000 clients worldwide already using CMC to trade the global markets.**

Want more market-moving news?

Stay informed on the move with our powerful,
award-winning mobile trading app^

*143 awards globally 2013-2017.
**Based on figures from CMC Markets' 2017-18 annual report.
^Awarded Best Mobile Phone/Tablet App, based on highest user satisfaction among spread betters, CFD and FX traders, Investment Trends 2018 UK Leverage Trading Report.

The charts above are for illustrative purposes only. Past performance is not indicative of future results.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

CMC Markets UK plc (173730) and CMC Spreadbet plc (170627) are authorised and regulated by the Financial Conduct Authority in the United Kingdom.

Telephone calls and online chat conversations may be recorded and monitored. Apple, iPad, and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc. This website uses cookies to obtain information about your general internet usage. Removal of cookies may affect the operation of certain parts of this website. Learn about cookies and how to remove them. Portions of this page are reproduced from work created and shared by Google and used according to terms described in the Creative Commons 3.0 Attribution License.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets, CFDs, OTC options or any of our other products work and whether you can afford to take the high risk of losing your money.