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  4. Summer 2009
  5. World Oil: Market or Mayhem?

World Oil: Market or Mayhem?

  • James L. Smith
Journal of Economic Perspectives
vol. 23, no. 3, Summer 2009
(pp. 145-64)
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Abstract

Many observers regard the world oil market as a puzzle. Why are oil prices so volatile? Why did prices spike in the summer of 2008, and what role did speculators play? How important is OPEC? Where are oil prices headed in the long run? Is "peak oil" a genuine concern? Any attempt to answer these questions must be informed and disciplined by economics. We examine the evidence on each of these issues and provide an interpretation of developments in the world oil market from the perspective of economic theory.

Citation

Smith, James L. 2009. "World Oil: Market or Mayhem?" Journal of Economic Perspectives, 23 (3): 145-64. DOI: 10.1257/jep.23.3.145

JEL Classification

  • G13 Contingent Pricing; Futures Pricing; option pricing
  • L71 Mining, Extraction, and Refining: Hydrocarbon Fuels
  • Q41 Energy: Demand and Supply
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