[FoRK] Authoritative explanation of gas spike in 2007/8?

Lucas Gonze lucas.gonze at gmail.com
Tue Oct 13 10:52:57 PDT 2009


I can't figure out how "price is a function of the current and future
spare capacity of oil" differs from "oil price is a function of
supply."

But the diagnosis that transparency is the key seems like a good,
clear, simple diagnosis for policy makers to work with.

On Tue, Oct 13, 2009 at 2:43 AM, Jim Whitehead <ejw at cs.ucsc.edu> wrote:
> Ah, thanks. This gave me some new search terms, which allowed me to find the
> following article:
>
> Understanding Oil Price Behavior through an Analysis of a Crisis
> Leonardo Maugeri
> Review of Environmental Economics and Policy 2009 3(2):147-166;
> doi:10.1093/reep/rep007
> http://reep.oxfordjournals.org/cgi/content/abstract/3/2/147
>
> Abstract:
>
> This article seeks to identify and explain both the fundamental and the more
> controversial elements that shape the dynamics of the oil market, using the
> recent oil crisis as the basic framework for analysis. The article suggests
> that the price of oil is essentially a function of the current and future
> spare capacity of oil. However, spare capacity alone cannot fully explain
> the extent and timing of oil price movements. Other important factors must
> be taken into account, including, above all, the expectations of market
> operators, who tend to be influenced by both the perceived current and
> future level of spare capacity and the unreliable data that have plagued the
> oil world since its inception. The article also suggests that bottlenecks in
> the oil refining system may play an important role in oil price movements,
> but tends to downgrade the importance of other factors, such as the
> influence of OPEC and financial speculation. Finally, the article suggests
> some reforms to make the oil market more transparent and possibly more
> stable, which is a prerequisite for making investments in energy efficiency
> and renewables in the near future.
>
> - Jim
>
> Reese wrote:
>>
>> Reese wrote:
>>
>>> If anyone insists, I'll dig up links to a domestic news article that
>>> outlines the Wall Street involvement and an Asia Times (IIRC) article
>>
>>
>> Here they are, I stumbled across them almost accidentally:
>>
>> http://atimes.com/atimes/Global_Economy/JE24Dj02.html
>>
>> http://www.cbsnews.com/stories/2009/01/08/60minutes/main4707770.shtml
>>
>> Note the date and venue of each article (I've heard elsewhere that
>> the Asia Times is something akin to the eastern equivalent of the WSJ
>> or the FT), then note the nearly word-for-word similarities in large
>> passages of text from each article.
>>
>> Once for the players who were not on the inside track, once again a
>> few months later for the mooks who were trying to be players but not
>> doing all of their homework. Compare the timing of each article with
>> the dates that the oil (gasoline) crisis played out on. I smell a rat.
>>
>> Reese
>>
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