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Crude Oil: Market Trends and Simulations Point toward Stable Equilibrium

Aleksandar Zaklan, Dawud Ansari () and Claudia Kemfert ()

DIW Economic Bulletin, 2017, vol. 7, issue 51/52, 567-573

Abstract: In this study, we report on the current state of the international market for crude oil. The market data we analyzed indicate that competition has intensified as a result of the now firmly-established shale oil extraction industry in the U.S. Model-based simulations also show that supply-side shifts should only have moderate price effects. This applies to both an expansion in U.S. shale oil production and a disruption of production in OPEC countries. Market data and simulations indicate that the crude oil market is currently in a new equilibrium that appears to be relatively robust in the short term. In the absence of further shocks, we can continue to expect a moderate price level for crude oil in the short term with corresponding implications for economic and climate policy.

Keywords: Crude oil markets; equilibrium modeling; shale oil; tight oil; OPEC (search for similar items in EconPapers)
JEL-codes: C63 Q31 Q35 Q41 Q43 (search for similar items in EconPapers)
Date: 2017
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