Oil Price and Demand Previously, man needed food, air and water to survive, but with the advent of time and technology, another very important factor has been added to this list: “OIL”. The price of oil is of critical importance to today's global economy, given that oil is the largest internationally traded commodity, both in terms of volume and value (creating what some analysts have called a “hydrocarbon economy”). Furthermore, the prices of energy-intensive goods and services are linked to energy prices, of which oil represents the largest share. The word petroleum has its roots in the Latin word oleum, meaning oil, and the Greek word petra, meaning rock. As the price of oleum soars, the links between fear and oil become clear to economists. Fears of a fuel oil shortage this winter helped push the benchmark crude price above $55 a barrel, a new record. The surge in oil prices, up more than 60% since the start of the year, is in turn raising fears for the global recovery. Oil prices have risen 30% over the past 12 months and are now well above the $22 to $28 target range set by the OPEC (Organization of the Petroleum Exporting Countries) oil cartel. There are two reference points for global oil prices. The first is the futures contract – an agreement for future delivery at a specified time; place and price of American light crude oil. The contract is widely used as a benchmark for determining prices of crude oil and refined products in the United States and abroad. Brent crude oil is a North Sea crude widely used to determine crude oil prices in Europe and other parts of the world. Together, the light crude futures contract and Brent crude are used as the basis for virtually all physical crude oil transactions. The general rule of thumb is that a $5 increase in the price of oil over a one-year period represents a 0.3 percent decline in global growth, according to the International Monetary Fund. OPEC agreed to increase production in June and the 44-year-old OPEC has the cartel is