Mechanizmy kształtujące cenę ropy naftowej w teorii i rzeczywistości

• Authors: Wojciech Potocki

Title variants

EN

Factors Shaping Crude Oil Prices in Theory and Practice

• Languages of publication: PL

Abstracts

EN

The article examines the influence of various factors on the price of crude oil according to two approaches: American economist Harold Hotelling’s rule of nonrenewable resources and a theory known as the short-term equilibrium approach. Empirical studies show that the Hotelling rule does not hold true in practice, Potocki says, because it is based on unstable assumptions. These include changing extraction costs and variable interest rates, in addition to factors such as market failure and strategic interactions. The short-term equilibrium model describes a crude oil pricing mechanism that is determined by a combination of economic, political and psychological factors among which the equilibrium of crude oil inventories plays a key role. The author is critical of the widespread use of a static resource/production ratio and argues that researchers should think over the consequences of misinterpreting this ratio and the implications of overestimating crude oil resources.

Keywords

EN

crude oil prices; Hotelling rule; nonrenewable resources; extraction costs; interest rate; short-term equilibrium model; resource/production ratio

• Publisher: Szkoła Główna Handlowa w Warszawie. Kolegium Analiz Ekonomicznych
• Journal: Gospodarka Narodowa. The Polish Journal of Economics
• Year: 2009
• Volume: 235
• Issue: 10
• Pages: 1-32

Dates

published

2009-10-31

Contributors

author

Wojciech Potocki

Identifiers

DOI

10.33119/GN/101216