Analysing Oil Prices
In this presentation, Dr Bassam Fattouh discusses three main approaches for analyzing oil prices: non-structural models, the supply-demand framework, and the informal approach. While non-structural models rely on the theory of exhaustible resources as the basis for understanding the oil market, the supply-demand framework uses behavioural equations that link oil demand and supply to its various determinants such as GDP growth, prices, and oil reserves. The informal approach on the other hand analyses oil price movements within specific contexts and episodes of oil market history. The latter approach is then used to identify some factors that have affected oil prices movements in recent years and analyses whether these drivers reflect structural changes in the oil market. This presentation is based on a paper titled: The Drivers of Oil Prices: The Usefulness and Limitations of Non-structural, Supply-Demand and Informal Approaches.