Generally, the oil prices are correlated with the quality of crude oil, like in the case of other trade products. There are several sorts of oil, each with different qualities and prices. The difference is primarily based on the chemical composition of crude oil. The sulphur content and the energy density are the most important factors in determining the correct pricing for the barrel of crude.
The trade itself takes place between the provider and the consumer on the stock exchange markets. The most well-known and professional stock exchanges are the New York Mercantile Exchange (NYME) and the ICE Futures in London, but we may find similar stock markets in Rotterdam, Shanghai, Chicago and Singapore.
The price is generally based on the relation between supply and demand, but there are other contributing factors, that may influence it, such as natural disasters, rates, short-lived political panicking, or the sheer produced quantity of a certain crude type.
The history of the crude price shows a general variation, as we can see nowadays: it's a volatile price, permanently fluctuating. The price is never high enough, it never fits the hopes of the traders.
The Golden Age of the Lowest Prices of Oil
But even this trade-branch has had it's golden age. This period was between World War I and the crisis during the 1970's. Ford's automobiles began being mass-produced in the early 1920's an gradually grew into an everyday utility for the average US citizen. So the use of gasoline experienced a fast rising. Almost 2,6 million barrel were used a day in the states, which was a sign of very good (low) oil prices. The valuation at that time was between 1.28 and 1.8 $ per barrel of crude oil, a really unbelievable price for today.
But the Golden age had come to an end in the 1970's, with the complex and repeated crisis in the Middle East. This made oil prices to shockingly raise up to 11-15$/ barrel, further on during the 1980's the price of crude reached almost 30$, and, unfortunately, the biggest change came during the 1990's and through the fist decade of the 21st century. Today, a barrel costs 98-100 $.
Although, the value of the dollar depreciated a great deal in this time (because of inflationary measures), the price of crude oil does show a much more depressing profile.