Oil Markets in 2012: Calm or Turbulent Waters?

To most analysts, the combination of geopolitical and economic factors constitutes a ‘perfect storm’ that will keep an upward pressure on oil the price for the rest of 2012. The purpose of this short article is to broaden the debate and consider some potential weaknesses in the dominant story. The article will highlight three main points. First, the premises upon which the story of tightened market fundamentals is built are subject to a wide degree of uncertainty. Second, the channels expected to put an upward pressure on the oil price are not exogenous: they tend to interact with each other and are shaped in part by oil price behaviour. Finally, the feedback from policy circles seems to be different this time from that seen in the previous oil price cycle, and thus should not be ignored. This is not to say that dominant expectations of very tight market fundamentals may not materialize. They may well do, but this is not a foregone conclusion.

By: Bassam Fattouh

Latest Tweets from @OxfordEnergy

  • LNG in marine transport – is it about to become the environmentally-friendly fuel of choice? https://t.co/iN1e4pdLX7

    September 18th

  • OIES presentation quoted on impact of Iranian sanctions: oil market backdrop different with crude stocks below 5-ye… https://t.co/rwJaHHwzbk

    September 15th

  • OIES’s @thierry_bros on the need to move from oil to energy storage for the benefit of all - https://t.co/8yAzoF3pf4

    September 14th

Sign up for our Newsletter

Register your email address here and we will send you notification of new publications, comment, articles etc. automatically.