As in previous years, prices over the last twelve months have been highly volatile. The market imbalances already seen in past years have been stretched to the limit. The oil market was dominated by pressure on the demand side and by fears that supply would be neither be sufficient nor secure.

2008 was the eighth consecutive year in which the price of oil had continued to rise, the longest period of growth since records began in 1861.

Only now have the emerging economies begun to reduce the subsidies applied to oil-based derivatives (some have still not done so), and this will have a direct effect on demand. The weakness of the dollar and investments in futures that sought to profit from short-term investments have led to a fall in the price of a barrel of oil.

Experts believe that the rise in oil prices was not just a phase but rather a strong trend that is merely taking a break. If the price is not high, the necessary investment required, in deep water areas for example, will not be made, as it requires oil to be a profitable commodity with a high rate of return. And if this investment is not made, not enough oil will be produced to satisfy world demand, particularly during periods of economic expansion.

This is a response to the general increase in its consumption (it is being traded at the highest rates of all the hydrocarbons), due in great part to its increased use in the generation of electricity, which in turn has resulted from its use as an alternative to oil and gas derivatives as the cost of these products has steadily increased in recent years.

This increase in consumption costs also had a negative effect on demand, particularly during the second half of 2008.