IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

The Petroleum Market: the Ongoing Oil Price 'Shock' and the Next 'Counter-Shock'

  • François Lescaroux

This paper documents that the oil market has a natural tendency to experience an alternation of periods of turbulence and stability because of weak price-elasticities of supply and demand, responsible for the fact that “there is always too much or too little oil” (Watkins, 1937). In particular, it proposes a simple “Econ 101” explanation for the surge in both the level and the volatility of oil prices over the last few years. The analysis shows that despite the 2009 global recession, there still is “too little oil”, therefore the energy crisis is not yet over and the price should rise to new record levels in the mid-term. On the other hand, simulations provide evidence that spare capacities should be built up again in the long-term—that is, there might be “too much oil” again—and hence the nominal price could correct downward and enter a new steady period once sufficient investment is made.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Article provided by CEPII research center in its journal International Economics/Economie Internationale.

Volume (Year): (2010)
Issue (Month): 121 ()
Pages: 99-130

in new window

Handle: RePEc:cii:cepiei:2010-1te
Contact details of provider: Postal: 113, rue de Grenelle, 75700 Paris SP07
Phone: 33 01 53 68 55 00
Fax: 33 01 53 68 55 01
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:cii:cepiei:2010-1te. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.