OPEC and the Price of Petroleum

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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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.

• Angewandte Ökonometrie
• Dynamische Systeme
• Energiewirtschaft
• Optimale Kontrolltheorie
• development
• dynamical systems
• econometrics
• economic theory
• equilibrium
• institutions
• optimal control
• optimization
• petroleum
• value-at-risk
• Ökonom

• Sonderforschungsbereich 178, Universität Konstanz, Konstanz, Germany

  Michael Rauscher

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