Adjusting to Volatile Energy PricesPeterson Institute, 1994 - 262 pages Oil price volatility has been highly criticized on many fronts, from the top-level official to the average consumer. Authorities from both producing and consuming nations have called for mechanisms to restore order to a chaotic market. The author traces the development of petroleum commodity markets, then examines the quest by producers and consumers for stability in world oil markets. He finds that modest producer and consumer gains can be realized through negotiations that achieve removal of barriers to trade, elimination of hurdles to foreign investment, and strengthening of financial institutions. Verleger reviews previous attempts to stabilize price fluctuations of other commodities and finds that these efforts have invariably failed. He argues that the very size of the oil market makes it unlikely that an effort to stabilize oil prices would succeed. Moreover, he shows that an oil price stabilization agreement would impose large costs on consumers. |
Contents
Introduction | 1 |
Why a Dialogue? | 11 |
1993 | 27 |
Function Nature | 41 |
Price | 45 |
The Objectives of the Participants | 85 |
Little interest in discussing The European | 101 |
The Market Alternative to Price | 133 |
654 | 147 |
Framing a Dialogue | 167 |
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benefits billion Brent buffer stock buyer capacity capital cartels commodity agreements commodity markets competition consumers and producers consuming countries cost coun crude oil decline delivery demand dialogue economic efficient energy Europe example exchange exporting countries financial instruments firms forward contracts fuel oil funds futures contracts futures markets Gasoil gasoline hedging higher impact imports income Indonesia industrialized countries International International Energy Agency investment issue Japan Kuwait Mabro market shares McNicol multinational negotiations Nigeria noted offered oil companies oil market oil prices oil producers oil-exporting countries OPEC options output percent Petroleum Intelligence Weekly potential price increases price of oil price stabilization price volatility problem producer-consumer producers and consumers producing countries proposed Prudhoe Bay purchase put options reduce refining and marketing result revenues risk Saudi Arabia sell spot market spot prices strategic stocks strike price Subroto supply swaps taxes tion trade transactions United World Bank