Oil and its Markets

PSL Quarterly Review, Vol. 68, No. 273, pp. 151-175, 2015

25 Pages Posted: 20 Sep 2015 Last revised: 16 Jan 2018

Date Written: June 15, 2015

Abstract

Oil markets are extremely complex, characterized by an interplay of economic, political, technological and ecological issues. The paper begins by pointing to the high ratio between fixed and variable costs as a characteristic of the oil sector in all its production stages. Then the story of the sector is sketched, since the expansion of Rockefeller’s Standard Oil Trust in the late Nineteenth century. Anti-trust intervention and collusion characterize the first part of the story; the notion of “trilateral oligopoly” (oil companies, producing and consuming countries) is then utilized in interpreting the developments since the Second World War. An illustration and a critique of the role played by financial markets in the determination of oil prices is accompanied by a critique of the theories interpreting oil prices as determined by its nature as a scarce natural resource. Recent trends in the oil sector, with the development of shale oil, are briefly considered.

Keywords: Oil, Shale oil, Brent, Oligopoly

JEL Classification: L13, L71, Q40, Q41, Q43

Suggested Citation

Roncaglia, Alessandro, Oil and its Markets (June 15, 2015). PSL Quarterly Review, Vol. 68, No. 273, pp. 151-175, 2015, Available at SSRN: https://ssrn.com/abstract=2662869

Alessandro Roncaglia (Contact Author)

Sapienza University of Rome ( email )

Piazzale Aldo Moro 5
Rome, 00185
Italy

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
193
Abstract Views
1,122
Rank
283,614
PlumX Metrics