IAEE Members and subscribers to The Energy Journal: Please log in to access the full text article or receive discounted pricing for this article.

OECD Oil Demand Dynamics: Trends and Asymmetries

Oil market data of the 1980s reject a simple, symmetric reduced-form model of dynamic oil demand in the OECD countries. Tests of price asymmetric long-run demand models produce ambiguous results. The pooled time series estimations find near unitary output elasticities, and reject linear demand models in favor of constant elasticity formulations. Despite large differences in product prices and crude prices, the data cannot reject use of a crude price model fir aggregate oil demand. A reduced-form model symmetric in product prices but with technology trends for non-price oil conservation compares favorably with other formulations, and provides slightly lower projections of future oil demand intensity. However, even these lower econometric projections imply substantial increases in aggregate oil demand, increases which exceed those found in the conventional judgmental estimates.

Purchase ( $25 )

Energy Specializations: Petroleum – Markets and Prices for Crude Oil and Products; Energy Modeling – Energy Data, Modeling, and Policy Analysis

JEL Codes: Q41: Energy: Demand and Supply; Prices, C51: Model Construction and Estimation, Q40: Energy: General, Q35: Hydrocarbon Resources, C53: Forecasting Models; Simulation Methods, Q38: Nonrenewable Resources and Conservation: Government Policy

Keywords: Oil demand, OECD, Asymmetry, Constant elasticity model, Oil prices

DOI: 10.5547/ISSN0195-6574-EJ-Vol14-No1-6

Published in Volume 14, Number 1 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


© 2023 International Association for Energy Economics | Privacy Policy | Return Policy