Several things cause oil prices to rise and fall.
Supply and demand. Increased demand increases the price if supply does not increase at the same time.
Reduced demand likewise reduces the price, unless supply is also reduced.
Speculation and purchase of it as a commodity, like silver, gold, and currency. Oil is traded in the same way, and confidence can cause its price to go up and down. Confidence can be knocked by things like a war in an oil producing nation, causing prices to go up on fear of reduced supply.
Oil producing nations manipulate supply, reducing output to maintain prices as high as possible of a benefit to themselves.
They may increase supply at times when economic problems in countries they supply may lead to a reduced demand.Why do oil prices fall?
Supply goes up through finding more reserves. Costs in finding or delivering oil is reduced. Stability (i.e. peace) in oil producing regions increases. Environmental or governmental bottlenecks are reduced. Oil speculation predicts falling prices. Refining estimates reset to the lower oil cost.
You're going to hear a lot of wacky ideas on this. Just keep in mind, truth has a sound. We all know it when we hear or read it. It is the sound of dispassionate and logically laid out assertions. This sound on it's own is not proof of truth, but it is a good start.
Oil prices are set by pure speculation on future oil prices.
Speculation by its very nature is an endlessly repeating pyramid scheme.
It is guaranteed to cause speculative bubbles and busts.
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