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Prospects for the World Oil Market

This essay recapitulates a recent review article on world oil pricing.It also summarizes my own thinking and writing about oil problems over the last decade.In brief, I maintain that the first price jump (of 1973-1974), from about $3 to $12 per barrel, represents the "correct" adjustment from the point of view of the "core" producing countries (Saudi Arabia, Kuwait, and the United Arabs Emirates), whose objective it should be to maximize profits over time. (I agree with Erickson and other analysts that Saudi Arabia, Kuwait, and the UAE are the swing producers that set the price.)

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Energy Specializations: Petroleum – Markets and Prices for Crude Oil and Products

JEL Codes:
L13 - Oligopoly and Other Imperfect Markets

Keywords: World oil market, Oil pricing, OPEC, volatility

DOI: 10.5547/ISSN0195-6574-EJ-Vol6-No1-3

Published in Volume 6, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.