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jueves, febrero 09, 2012

Cato Handbook for Policymakers: Energy Policy


The conventional narrative is that changes in gasoline prices can be almost entirely explained over the long run by changes in world crude oil prices. World crude oil prices have increased for six consecutive years -- the longest sustained oil price increase in history -- because of spectacular global economic growth over that same period. The global economic boom of 2003 -- 08 has increased the demand for all commodities -- including crude oil -- and this demand shock hit the market at a time when both excess oil production capacity and private oil inventories were at very low levels. Given the fact that neither the demand for nor the supply of crude oil changes very much in the short term in response to price changes, even a modest increase in demand can have a major effect on oil, and thus gasoline, prices.

 

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Rodrigo González Fernández
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