Publications: The Petroleum Economics Monthly

Structural Changes Make Crude Inventories Irrelevant (June 2012)


This issue of The Petroleum Economics Monthly focuses on the bidirectional process that determines oil prices. The linkage is not well understood, particularly by those writing on oil markets at financial institutions or at some consulting firms. Here we explain the critical role played by the marketing and distribution parts of the oil business. Of particular importance are the times when these firms run down inventories. In such instances, crude prices can rise significantly (twenty to forty percent) even when oil producers push larger and larger crude volumes into refinery tanks.


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