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Analysing
Oil Prices: Usefulness and Limitations of Existing Approaches
By Bassam
Fattouh
In
this presentation: Analysing
Oil Prices: Usefulness and Limitations of Existing Approaches,
Dr
Bassam Fattouh discusses three main approaches for analyzing oil
prices: non-structural models, the supply-demand framework, and
the informal approach.
While
non-structural models rely on the theory of exhaustible resources
as the basis for understanding the oil market, the supply-demand
framework uses behavioural equations that link oil demand and
supply to its various determinants such as GDP growth, prices,
and oil reserves.
The
informal approach on the other hand analyses oil price movements
within specific contexts and episodes of oil market history. The
latter approach is then used to identify some factors that have
affected oil prices movements in recent years and analyses whether
these drivers reflect structural changes in the oil market.
This
presentation is based on a paper titled: The Drivers of Oil Prices:
The Usefulness and Limitations of Non-structural, Supply-Demand
and Informal Approaches.
Bassam
Fattouh
is consultan and senior research felow of the Oxford Institute
for Energy Studies. Petroleumworld does not necessarily share
these views.
Editor's Note: This presentation was prepared for The European
Investment Bank and originally published by oxfordenergy.org,
Feb. 7, 2007. Petroleumworld reprint it in the interest of our
readers.
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Petroleumworld
News 02/11/07
Copyright
© 2006 Bassam Fattouh.
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