Once there were multiple oil cartels, each determining their own production rates and price per barrel of crude. Because they sniped at one another and caused a lot of wild fluctuations, OPEC was formed to bring some stability to the situation by controlling overall output and calling a singular price. That all changed in the mid 1980s when oil went to a world commodity pricing system.
The commodities market is a strange place where consumers — big oil companies — write futures contracts for crude deliveries to their refineries, and speculators — non-consumers — gamble on whether the price of crude will go up or down...............................................Full Article: Source
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