The Price Band and Oil Price Dynamics

The proposal for a crude oil price band seems to be gathering support. This comment discusses some of the limitations of an oil price band then it proposes a new framework for understanding the recent dynamics of oil price movements based on feedbacks. Rather than aiming at stabilising spot prices within a band the comment argues that the main objective of both oil importing and exporting governments should be to stabilise market participants’ long term expectations. This requires a move away from focusing solely on the role of speculation and transparency issues towards a more general framework that also takes into account the inflexibilities in the oil market.

By: Bassam Fattouh

Latest Tweets from @OxfordEnergy

  • Jonathan Stern on the latest Groningen earthquake: I think it is likely to accelerate even further the phase-out of… https://t.co/d1tGcAIAjp

    May 23rd

  • About 43% of the industrial gas demand in Europe could, in theory, decline in the 2020s as a result of decarbonizat… https://t.co/0iMqP4dCsd

    May 23rd

  • New OIES comment on Saudi Arabia’s challenging balancing act: If premature return of withheld supplies back into th… https://t.co/J0LoxVkSAJ

    May 23rd

Sign up for our Newsletter

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