Oil is involved in so much of what we do that we can’t help but be affected by fluctuations in its price. With this market we seek to predict the price per barrel by the end of this year, both as an exercise in prediction itself and as a way of indirectly and coarsely predicting the likelihood of major oil-price-affecting events occurring in 2008.

The price of oil has risen from around the $100 USD mark at the beginning of the year up to $135 by mid-year. There are so many factors that influence the price, from supply not keeping pace with demand, particularly from the Asian economies that are continuing to expand apace, geopolitics, speculative investors driving the price up, war and conflict interrupting supplies and even the winter weather in Europe and the US.

For the purposes of this market we will use the USD price per barrel of “light sweet crude” (West Texas Intermediate).