Speculators have some effect, especially on a day-to-day basis, on the price of oil. In the longer term, weeks and months, the price is determined by supply and demand (or by oil traders’ perceptions of supply and demand). The United States, as far and away the largest consumer (nearly 25% of all world oil and 44% of all world gasoline is burned in the US), has the greatest impact on the price. And with 70% of US oil consumption in the transportation sector, driving cars is the biggest piece of the pie.
China’s expanding economy affects the price too, as do many other things. But the amount of driving by US drivers is the single thing that affects the price of oil the most, short of unpredictable geopolitical things like nuclear war in the Middle East.
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