A piece written by BP Group Chief Economist Spencer Dale title "New Economics of Oil"

He says:

The oil market has changed very significantly over the last 10 or 15 years. The principles and beliefs that served us well in the past are no longer as useful for analysing the oil market. We need an updated set of principles reflecting the New Economics of Oil.

Dale questions 4 principles

  1. Oil is an exhaustible resource: it will eventually run out
  2. Oil demand and supply curves are steep: ie they are very price inelastic
  3. Oil flows from east to west: most obviously, oil is produced in the Middle East and flows to Europe and America.
  4. OPEC stabilises the oil market

Its quite a long and detailed piece, so I'm not going to attempt to summarise it. Think of this as a DIY education article!

Link to the PDF is here.

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