Brent futures, also represented by the exchange-traded fund United States Oil (USO), jumped above $115 in June as geopolitical conflict in both Ukraine and Iraq led speculators to worry about supply disruptions.
In Ukraine, Russian separatists attempted to capture cities to bring them under Russian control. Oil prices have fluctuated daily with the markets view of how well peace negotiations are going between Russia and Ukraine.
Meanwhile, in Iraq and Syria, Sunni militant groups have seized several cities and declared an Islamic state. The threat reminds analysts of the Arab Spring revolts three years ago, which could lead to supply disruptions in OPEC's two largest oil producers, Saudi Arabia and Iraq.
With volatile geopolitical events being the catalyst for oil price increases, it is unlikely that prices stay elevated for long periods of time.
In the chart below, the price action of oil tends to spike higher on the initial reaction to a geopolitical event taking place, but decline in the aftermath, when speculators realize they have pushed prices up too high.