The first oil wells were drilled in China in the 4th century. James Miller Williams in Oil Springs, Ontario, Canada in 1858, excavated the first commercial oil well drilled in North America. The American petroleum industry commenced with Edwin Drake's discovery of oil in 1859, near Titusville, Pennsylvania. Offshore exploration and extraction of oil agitates the encompassing marine environment. References to oil prices are generally related to the spot price of either WTI/Light Crude as traded on New York Mercantile Exchange (NYMEX). Priced by the barrel, Crude Oil is rapidly becoming the most costly commodity on the market (second only to Gold).
Oil pricing is extremely reliant on both its grade and location. You can't talk about the future of oil without talking about the "Hubbert Peak" oil theory. This hypothesis depicts the long-term rate of production of conventional oil and other fuels. It assumes that oil reserves are not replenishable. It also predicts that future world oil production must unavoidably reach a crest and then decline as these reserves are exhausted.
I will be discussing what I think the future of crude oil will be and what effects it will have on the world. As the years go by I think that we can expect to see a rise in the price of crude oil, based on the current situation of crude oil prices I think that we will see a big increase as crude oil slowly runs out.
Even amidst the so-called Great Recession, majority of the world's countries utilize crude oil and its by-products and, hence, profits in crude oil futures speculation will never dry up, so to speak. In said transaction, the option buyer hopes for the price of a crude oil future to sufficiently increase before the expiration date so that it can be sold for profit. However, a loss can also be sustained if and when said crude futures drops in price anytime before the expiration period.
Let's also assume that the current date is the 15th of January 2009 and the contract price for 1000 barrels of oil is $100. John believes that the price of crude oil will increase in two months' time and Jane believes that it will fall in the same period.
Both orders will then be routed to the crude oil futures exchange for pairing and execution, thus, obligating both John and Jane to the terms of the contract.