Economics at your fingertips  

What can be said about the rise and fall in oil prices?

Victoria Saporta, Matt Trott () and Merxe Tudela
Additional contact information
Matt Trott: Bank of England, Postal: Threadneedle Street, London, EC2R 8AH

Bank of England Quarterly Bulletin, 2009, vol. 49, issue 3, 215-225

Abstract: The price of oil rose steadily between the middle of 2003 and the end of 2007, rose further and more rapidly until mid-2008 and fell sharply until the end of that year. Commentators agree that a significant part of the increase in the oil price over that period was due to rapid demand growth from emerging markets, but there are substantial differences of view about the relative importance of other factors, and limited work thus far in explaining the large fall in oil prices in the second half of 2008. The purpose of this article is to analyse the main explanations for the rise and fall in oil prices in the five years until the end of 2008. It argues that shocks to oil demand and supply, coupled with the institutional factors of the oil market, are qualitatively consistent with the direction of price movements, although the magnitude of the rise and subsequent fall during 2008 is more difficult to justify. The available empirical evidence suggests that financial flows into oil markets have not been an important factor over the period as a whole. Nonetheless, one cannot rule out the possibility that some part of the sharp rise and fall in the oil price in 2008 might have had some of the characteristics of an asset price bubble.

Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link) ... 370528FCF9014E3B6295 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Bank of England Quarterly Bulletin is currently edited by Lindsey Fowler

More articles in Bank of England Quarterly Bulletin from Bank of England Publications Group Bank of England Threadneedle Street London EC2R 8AH. Contact information at EDIRC.
Bibliographic data for series maintained by Publications Group ().

Page updated 2023-03-26
Handle: RePEc:boe:qbullt:0004