As the world became more dependent on oil, oil prices became a matter of political and global economic importance. Major oil companies set crude oil prices, until control shifted in the 1960s to oil exporting countries. Price forecasting became important in the early 1960s after a series of oil price hikes turned into oil crises. In 1983, crude oil futures joined the New York Mercantile Exchange (NYMEX) and was traded like other commodities.¹ Natural gas futures became available on NYMEX in 1990.² NYMEX is currently owned and operated by the Chicago Mercantile Exchange (CME).³ For the first time in oil price history, in April 2020 the price of oil dropped below zero to -$37 per barrel. At that time, demand for oil dropped due to the coronavirus pandemic, and supply increased due to the inability of countries such as Saudi Arabia, Russia, and OPEC countries to agree on oil production reduction, which drove up demand for oil storage.⁴

Price benchmarks are used in the oil and gas industry to give buyers a way to value the commodity based on quality and locations. The main benchmarks used in this industry are:

• Brent Blend, is the most common, internationally used oil benchmark. It is based in London, traded on the InterContinental Exchange (ICE), and consists of light, sweet crude oil from offshore drilling in the North Sea.
• West Texas Intermediate (WTI) is used for light and sweet oil in the United States, specifically, crude oil that comes from land-locked wells in Oklahoma.
• Dubai/Oman is used for heavier oil with a higher sulfur content from the Persian Gulf to the Asian market.⁵
• Henry Hub is the benchmark for North American natural gas and global liquefied natural gas (LNG), based off of the Henry Hub natural gas pipeline in Louisiana.⁶ Markets with no natural gas pipelines use crude oil as a price proxy,⁷ but that is changing.

Oil that trades on the U.S. futures market is priced at a contract for oil delivered to Cushing, Oklahoma, a critical storage hub where many oil pipelines converge.⁸

Countries and international organizations like the United Nations influence the price of oil and natural gas both domestically and abroad through the use of tariffs, embargoes, and subsidies.

• Tariffs are additional taxes on imported goods.
• Embargoes or sanctions ban trade with a commodity or whole country.
• Subsidies are money from the government to an industry in order to keep prices on commodities low.