Oil prices are cyclical, rising in response to either high inflation, rapid economic growth, or both. On the other side, when the global economy is about to enter a recession, oil tends to underperform.
Oil saw a massive run-up from 40 to 140 dollars in 2007–2008, contributing to the worldwide recession. It rapidly dropped to 40 USD as demand dwindled owing to global economic concerns. Demand resurfaced as the worldwide situation improved, and WTI recovered to about 120 USD. It then fluctuated between 100 and 40 dollars.
WTI oil plummeted below 0 USD during the panic of 2020 following the world's first COVID shutdown, only to rise enormously when central banks began printing money, and people resumed their everyday lives, increasing demand.
As Russia invaded Ukraine in 2022, oil prices soared to above 140 dollars per barrel, causing supply concerns mostly in Europe.
With a strategy of good exit timing, WTI oil has demonstrated some excellent returns for long-term investors. On the other hand, its volatility is ideal for short-term and swing traders.