The Truth About Crude Oil, Pricing and The Stock Market
by Craig Dahl

Crude Oil Price…Get the facts about this "Black Gold". Understand your oil investment options. It’s imperative to look deep into the earth and on the surface to find the secrets about this precious resource. And of course, on the surface, we have the geo-political issues to consider. Now with Saudi Arabia entering into an era of turmoil there are direct and immediate consequences on crude oil investments.

(PRWEB) July 5, 2004 -- Remember the 70’s oil shortage? Was there really an oil shortage? Gasoline prices and the crude oil price shot up over night. Prior to the price increase, gasoline at independent stations, like Douglas Stations, was $0.18/gallon while Texaco were running $0.25/gallon.

Within a few months the price of gasoline shot up over $0.50/gallon...everywhere! And to top it off, the media stressed a global "oil shortage". The panic mode evolved as gas rationing developed. Consumers could purchase gasoline on specific days depending upon the vehicles license plate identification.

All of the geological evidence supported the premise that there was plenty of oil. But why the high prices? And over night? These are some questions to ponder while looking deeper into the oil marketplace.

This Black Gold is the crux of our present day society. In the United States, approximately 40% of the energy consumed is from oil. And of that oil, over 95% is utilized for transportation purposes. This makes the Black Gold a strong economic presence.

A major influence with the supply of crude oil is the Organization of Petroleum Exporting Countries (OPEC). In the early 70’s, during the "oil shortage", the beginnings of OPEC emerged. The ownership of the oil companies in the Middle East transferred ownership to the governments.

Currently OPEC countries include: Saudi Arabia, Iran, Iraq, Algeria, Ecuador, Gabon, the United Arab Emirates, Venezuela, Indonesia, Kuwait and Libya. This organization developed the power to influence the price of crude oil. In 1973 a barrel of crude oil sold on the market for $7, within 10-years it rose to $34 a barrel, not bad for an oil investment...that's over 400%!

As OPEC influenced the crude oil price, other means of energy and energy efficient means were created. More efficient cars, solar energy, wind energy. The exploration and discovery of new forms of energy is an on-going process. During the oil crisis of the 70’s, the Middle East accounted for 65% of the world’s oil supply. Today, it’s estimated the OPEC nations account for about 40% of the world’s oil. The U.S. has been able to focus on other localities for oil production and improve refining processes since the 70’s.

It was during the late 1990’s OPEC went through a major change. They managed to align with the several non-OPEC countries to control the production. This in turn controlled the world’s pricing of crude. A quota system was put into place to control the output of crude oil from OPEC and non-OPEC countries. With less production, the costs increase and profits increase. Simply, the supply and demand principle. As long as the non-OPEC members follow the quota system, the consumer can expect to see higher prices on the oil-based products, specifically gasoline.

As an oil investment, watching how the non-OPEC nations follow the OPEC quota system becomes crucial. When a flood of crude comes on the marketplace it can cause the prices to drop, otherwise, they remain steady and/or increase. Currently OPEC has slowed it’s production causing the gasoline prices to go over $2.00/gallon on the retail level. The cost of distribution and the amount of refineries contribute to the escalating cost of gasoline; nevertheless, there’s the ability to make money in energy related stocks regardless of the current retail gasoline prices.

To view some potential energy related stocks for investment purposes, view the entire article at

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