TY - JOUR

T1 - Crude oil

T2 - Market trends and simulations point toward stable equilibrium

AU - Zaklan, Aleksandar

AU - Ansari, Dawud

AU - Kemfert, Claudia

PY - 2017

Y1 - 2017

N2 - 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.

AB - 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.

KW - Economics

KW - crude oil markets

KW - equilibrium modeling

KW - tight oil

KW - shale oil

KW - OPEC

M3 - Journal articles

VL - 7

SP - 567

EP - 573

JO - DIW Economic Bulletin

JF - DIW Economic Bulletin

SN - 2192-7219

IS - 51/52

ER -