The price of oil in the international under its market oversupply and the continuing recession | ||
| Iraqi Journal For Economic Sciences | ||
| Article 1, Volume 0, Issue 48, October 2017, Pages 1-49 | ||
| Author | ||
| Dr. Ahmed Abrihi | ||
| Abstract | ||
| This paper addresses the factors responsible for changes in crude oil prices, in real market and financial sector. In order to prepare the analytical background for further investigation, it highlights the patterns of correlations of the real oil price and the most related prices of assets, exchange rate and government bond yield. The paper reviews the statistical behavior of oil price, quantities and the global macroeconomic environment. The topics discussed include the theory of differential rent, scarcity effect, the role of futures market and speculation, an strategies of energy of the major economies to investigate the prospects of oil market and the potential demand for OPEC's oil. The paper explores the interrelationship between spot and futures prices using daily data , explanatory power of real effective exchange rate, in addition to conventional demand and supply functions. Although, the paper finds regularities consistent with the predictions of economic theory, it concludes that the changes in real price of oil have, historically, tended to be difficult to predict. Further research works are recommended, particularly, in the areas of storage arbitrage and future financial contracts. | ||
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