Publications: Notes at the Margin

The Tin Lesson for Oil (July 12, 2021)


Detailed analyses of market histories have become an endangered practice. The economists, analysts at financial institutions, and reporters who follow individual commodities, groups of commodities, or even the economy rarely look back more than a few years. When they do, they tap into large databases and, as often as not, say a few words about the distant past—generally between 2000 and 2010—and then move to the present.


Oil analysts today are concentrating on the United Arab Emirates. At the recently completed meeting of OPEC and its hangers-on (OPEC+), the UAE refused to ratify a plan to increase production by four hundred thousand barrels per day each month beginning in August and agree to an extension of the current output agreement to the end of 2022. The UAE was willing to accept the increase. It was not, though, amenable to extending the agreement without an adjustment to its quota.


These commentaries make the oil market circumstances appear unique. However, a similar scenario played out in 1985 for another commodity: tin.


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