We all know oil prices are extremely volatile, and trying to predict them is a fool’s errand. But just how easily can they be impacted? Here’s look at the some of the craziest events that caused the price of oil to rise.
1. An oil trader wanted bragging rights.
You read that right. In early 2008, oil was hovering at just under $100 a barrel, and a guy decided he want to be the first to buy $100 oil. Why? Your guess is as good as ours. But the result was that oil prices rose when this guy — one person — artificially inflated the price by overpaying for some barrels of oil.
2. North Korea tested some missiles.
Although North Korea isn’t even a major oil-producing nation, even the news that it’s testing new missiles can get oil prices in a tizzy. In 2006 one of the military’s missile launch tests increased geopolitical tensions and contributed to oil’s rise past $75 — setting a new record high for oil prices at the time.
3. The U.S. government took steps to boost the economy.
As the economy struggled — in part due to already high oil prices — the U.S. Federal Reserve decided to take “aggressive steps to boost the U.S. economy” by buying mortgaged-back securities. The oil market’s response? Increase oil prices. No doubt that really helped struggling families on a budget.
4. Russia and Saudi Arabia said they were going to have a meeting.
There wasn’t an exchange of threats or a supply cut — they hadn’t even met yet. But that didn’t stop oil prices from going up after simply hearing that was a meeting had been scheduled. Talk about jumpy.
5. A ship contracted by the U.S. navy fired in the direction of an Iranian boat.
Talk about a warning shot heard ’round the world. While it’s true Iran is a major oil-exporting nation, this was essentially a non-event. An Iranian coast guard ship got too close to a U.S. cargo ship and then left after the cargo ship’s security fired some warning shots into the air. That’s it. In response, the global oil price rose by more than $3. Considering the amount of oil that changes hands every day, that’s a LOT of money going up in smoke because some Iranian ship captain fell asleep at the wheel.
6. Saboteurs in Nigeria bombed a pipeline.
This one is still ongoing. A group called the Niger Delta Avengers (not to be confused with Marvel’s Avengers) is curbing oil output in Nigeria by bombing pipelines. They’ve been at it all year, and each time oil prices have risen in response. Attacks on pipelines and oil facilities by a variety of different groups in places all over the world — including but not limited to Iraq, Saudi Arabia, Libya, Turkey, Yemen, etc. — have also caused global oil prices to spike.
7. Some stock broker got drunk. Yes really.
Talk about a nasty hangover. One night in June 2009, an oil futures trader drank more than he should have, blacked out, and bought $520 million worth of oil with his firm’s money. This massive purchase caused oil prices to jump by approximately $1.50 in less than a half an hour and cost this guy his job. Yikes.
So there you have it. The 7 craziest things that caused oil prices to rise and subsequently hurt families and economies in America, as well as all over the world. It’s way past time to realize we can’t control or predict oil prices and start moving to alternatives like ethanol, natural gas, and electricity.