| In this paper I analyze how various price regimes inherent to different oil industry structures affected crude oil prices in the 20th century. Overall, there are strong relationships between oil prices and the corresponding price regimes. Using an informal approach as well as concepts from economic theory, I also analyze the effects of supply and demand variables including spare capacity, stocks, futures prices, OPEC production, and GDP on crude oil prices from 2002 -- 2007. The results of my analysis are fairly consistent with economic theory as they elucidate the consequences of severe underinvestment in the oil industry and price volatility. Additionally, I analyze current oil prices and assess the implications for the oil industry, OPEC, and alternative energy producers. |
