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OPEC and the Price of Petroleum

Theoretical Considerations and Empirical Evidence

  • Book
  • © 1989

Overview

Authors:
  1. Michael Rauscher

    1. Sonderforschungsbereich 178, Universität Konstanz, Konstanz, Germany

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Part of the book series: Studies in International Economics and Institutions (INTERN.ECONOM.)

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Table of contents (7 chapters)

  1. Front Matter

    Pages I-XII
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  2. Introduction

    • Michael Rauscher
    Pages 1-7

  3. The world petroleum market: History and institutions

    • Michael Rauscher
    Pages 8-30

  4. The price of petroleum in economic theory

    • Michael Rauscher
    Pages 31-68

  5. An intertemporal model of OPEC’s pricing policy

    • Michael Rauscher
    Pages 69-105

  6. A simplified version of the model

    • Michael Rauscher
    Pages 106-129

  7. An econometric model of the world petroleum market

    • Michael Rauscher
    Pages 130-170

  8. Final remarks

    • Michael Rauscher
    Pages 171-175

  9. Back Matter

    Pages 176-208
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Keywords

About this book

1. 1. Oil price fluctuations and their impact on economic performance Drastic oil price fluctuations have been a major characteristic of the world petroleum market since the beginning of the seventies. The oil crises of 1973n4 and 1979/80 were followed by a dramatic drop of the oil price during the first two quarters of 1986. Starting from a level less than 2 $ per barrel in 1972, the spot market price of Arabian Light crude oil increased to some 35 $ in 1980, then slowly decreased, and finally fell to 13 $ in 1986 (annual averages). If monthly data are considered, the peaks of the oil price movement look even more dramatic. In December 1980 Arabian crude was traded for more than 40 $ a barrel, and in August 1986 the price was down at 8 $ (see Fig. 1. 1). 40 30 20 10 r o 84 88 76 80 72 Figure 1. 1: The spot market price of Saudi-Arabian Light crude oil! ! Data are taken from the Petroleum Economist and the OPEC Bulletin, various issues. 2 After the Second World War petroleum has become the most important energy resource. During the fifties and sixties its price was relatively low compared to other energy 2 sources like coal and firewood and it tended to drive them out of the market.

Authors and Affiliations

  • Sonderforschungsbereich 178, Universität Konstanz, Konstanz, Germany

    Michael Rauscher

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