1. OIL PRICES

2. The New York Mercantile Exchange (NYMEX) is a commodity exchange which was founded in 1978. It handles billions of dollars worth of energy products, metals, and other commodities that are bought and sold on the trading floor. These products are coal, crude oil, electricity, gasoline, heating oil, natural gas, palladium, platinum, propane. Commodities are bought and sold by traders and their prices—like the price of bananas at the grocery store— prices can change as often as a daily basis. Traders, spend all day, researching and analyzing current events and pricing indexes of commodities, then forecast their value into the future. If their predictions are on target, their profits can be significant.

4. Some key events that influenced oil prices in the past few decades are:oil prices The Yom Kippur War of 1973 was started by an attack on Israel by Syria and Egypt, the Yom Kippur War. When the United States and many countries in the Western world expressed support for Israel in this conflict, several Arab exporting nations imposed an oil embargo on nations supporting Israel, cutting off over 4 million barrles of oil. Between October 1972 and the end of 1974, the nominal price of oil quadrupled from $3.50 per barrel to more than $12 as a result of the curtailed oil production and supply. The Iranian Revolution of 1979 reduced the production of oil by 2-2.5 million barrels per day between November 1978 and June 1979. This event was the cause of the highest price of oil in post-World War II history and was compounded by its invasion by Iraq in September, 1980. The result of these events: worldwide crude oil production went down by 10 percent compared to 1979 and doubled oil prices from $14 to $35 per barrel. The Gulf War (1990-1991) was fought to liberate Kuwait from invasion by Iraq. During this period, crude oil prices entered a period of steady decline. In the buildup to the invasion, Iraq and Kuwait had been producing 4.3 million barrels of oil a day. This potential loss, coupled with threats to Saudi oil production, led to a rise in prices from $21 per barrel at the end of July to $46 per barrel in mid-October. The 2005 hurricane season was the most active Atlantic hurricane season in recorded history. Because of the United States’ Gulf Coast oil extracting and refining capacity, these storms led to speculative spikes in the price of crude oil. The damage to refinery capacity in the United States caused gasoline to soar to record prices.