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A pair of researchers, one with the Institute of Management and Economics at Clausthal University of Technology, the other the Department of Earth and Environment at Boston University, has found evidence that suggests oil prices might now be based on futures contracts instead of day-to-day price fluctuations. In their paper published in the journal Nature Energy, Esmail Ansari and Robert Kaufmann describe their study of the oil price market and suggest an explanation for its recent odd behavior.
Despite massive investments in renewable energy sources, the modern world is still very much dependent on both oil and natural gas. Because of that, the price of oil and the cost of obtaining it from the ground are still very important to virtually every country on the planet. For many years, the world was dependent on a few countries that were lucky enough to have huge amounts of oil beneath their land—many of those countries now make up OPEC. For much of the time of OPEC's dominance, the price of oil was set by its members, putting the rest of the world at their mercy. There was also the constant fear that someday in the not-to-distant future, the oil under the ground would run out. Because of these concerns, scientists looked into the possibility of extracting another type of oil (and gas) from the ground. It has come to be known as shale oil, though the researchers claim that the actual name is tight oil. It is oil that is obtained by injecting pressurized liquid into tight rock formations, releasing the oil and allowing it to be collected.
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