Over the years, oil price volatility has been a concern for producers and consumers
In case you are not skeptical about the ability of governments to understand what the oil price should be, the figure below shows the U.S. government’s purchases of oil for the Strategic Petroleum Reserve and the oil price over time. The first 500 million barrels were purchased when the oil price was an average of $85/barrel , which might seem reasonable considering the price is now $80, but the average price since the SPR was created has been $63/barrel.
What’s worse is the irrepressible urge that official forecasters have to predict ever-higher prices. The IEA does have scenarios where climate change policies result in lower oil prices, but their standard expectation, given stated policies or announced plans, is for prices to be flat or increase over the longer term, as the figure below shows. The EIA is in rough agreement as are many other forecasters.
Over time, the psychology driving oil price forecasts has changed repeatedly, with the figure below highlighting the evolution of IEA price forecasts/scenarios. They are generally representative of the consensus at any given time, which demonstrates that the consensus tells us more about the desire of forecasters to cluster together than about the accuracy of their forecasts.Finally, the use of strategic reserves for short-term political gain is certainly inadvisable.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
A lot of fellow Cal Bears are wondering: Why, Aaron Rodgers, why?Millions of children will probably be vaccinated before asinine holdouts like Aaron Rodgers, plus more from the week in Opinion.
Read more »
Why 'Dickinson' kept Hailee Steinfeld up at nightThe actor leaps into the MCU with 'Hawkeye' this month. But first she says farewell to an American icon — and one of the most underrated series on TV.
Read more »
Q&A: Why is there a standoff in the Sudan coup?While a coup ousted Sudan’s civilian government, anti-military protests continue. Here is an extensive interview with Khalid Mustafa Medani, a prominent Sudanese academic, on how things are evolving there.
Read more »
Why all your coworkers who quit are about to come back as 'boomerang employees'Why all your coworkers who quit are about to come back as 'boomerang employees.' (via CNBCMakeIt)
Read more »
Why Eating Pizza with A Knife and Fork Is Sometimes FineEverybody calm down, some slices — especially in Brazil — just require it
Read more »
Why Britain is such a noisy neighbourBritain’s relationship with the EU has a habit of interfering with set-piece events
Read more »