Scandinavian Working Papers in Economics

Working Paper Series,
Uppsala University, Department of Economics

No 1997:22: Economic Theory and the Supply of Oil

Ferdinand Banks ()
Additional contact information
Ferdinand Banks: Department of Economics, Postal: Department of Economics, Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

Abstract: This paper is concerned with four things. First, establishing the importance of the reserve-production ratio, and its significance relative to the 'life' of the oil reserves. Next, providing a simple derivation and discussion of Hotelling's theorem, while claiming its inadequacy for discussing physical as compared to financial assets. I then consider the short term pricing of oil presenting a simplified exposition of the 'convenience yield', and the part it plays in the term structure of oil prices. Finally, I take a look at a recent argument which claims that in reality there will not be an increased dependence of Middle East oil in the near or distant future. There is also a short conclusion in which some forecasts of the demand for oil in the years 2000 and 2010 are given.

Keywords: Reserve-produduction ratio; hotelling; convenience yield; oil reserves

JEL-codes: Q41

25 pages, August 15, 1998

Download statistics

Questions (including download problems) about the papers in this series should be directed to Ulrika Ă–jdeby ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2024-02-05 17:14:00.