Back to the Epoch of Low Prices?
” by Andrei Konoplyanik Invitation to discussion The year 1998 witnessed a continous oil price decline. By the start of 1999, prices fell twofold compared to the peak of 1997. (see: Current oil Price Behavior.) The prices appeared to be at their lowest in mid 1998, when Brent price reached $ 9.13/ barrel. According to information of the International Energy Agency (IEA), real prices (taking into account the inflation rate) decreased to such an extent only in the times of the Great Depression, i.e. in the 1930s. A supply excess over demand is stable and there are no signs whatsoever of its dispersion, which in itself makes prices go down. Speaking about the reasons and, which is most important, about prospects of further development of the oil market, the question is whether this is the case of price crisis (in the event it is overcome, oil prices will revert to $ 20/barrel level of one or two recent years) or the reflection of natural transition of the world economy into a different st
