Short and Long-Run Crude Oil Price Expectations in 1986 — Results of a Survey

Abstract

Knowledge of price expectations in the world oil market is useful for two main reasons. In the first place current prices are of little value for understanding the behaviour of consumers and investers in the volatile oil market. This is no more than saying that consumers and producers will respond differently to given price levels depending on their view of future prices in a market where lagged response is the rule and measured price elasticities are influenced by the state of expectations in the relevant time period. Secondly, the reliance of many producer governments on oil revenues means that the future price of oil is of direct relevance to the attainment of macro economic objectives for these countries.