The current oil price cycle and reflections on Mabro’s work

Journal article

Between 2011 and mid-2014, the oil price traded within a very narrow range, with quarterly average Brent prices exceeding the US$100/bbl mark for 14 consecutive quarters. This relative stability has been remarkable given the various shocks – ranging from macroeconomic shocks, to geopolitical shocks, to unplanned outages, and to supply shocks – that have hit the oil market. This relative price stability, however, was disrupted and since June 2014 the oil price has fallen sharply and price volatility has intensified. While multiple factors can account for the recent fall in the oil price, the role of OPEC and its dominant player, Saudi Arabia, has received special attention. This should come as no surprise. Mabro has always argued that OPEC’s output decisions (including the decision not to adjust output) matter the most in a ‘weak’ and ‘over-supplied’ market, and not in a tight market when OPEC is producing close to its maximum capacity.

Authors: Fattouh, B

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Oxford Institute for Energy Studies
• Journal: Oxford Energy Forum
• Volume: 100
• Pages: 13-16
• Publication date: 2015-05-01
• ISSN: 0959-7727
• Language: English
• Keywords: Oxford Energy Forum; OIES