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Re: Oil's 3 Epochs (inc. storage & speculation)
In a nut shell?
Mike -
Re: Oil's 3 Epochs (inc. storage & speculation)
Here is the Abstract from the pdf:Originally posted by Mega View Post
I have not yet read the pdf itself, so I really don't know what the above Abstract means ... sorry.We find strong evidence for changes in real oil price persistence and volatility across three well
defined periods since 1861. We argue that historically, the real price of oil has tended to be
highly persistent and volatile whenever rapid industrialization has coincided with uncertainty
regarding access to supply. We extend the commodity storage model to incorporate both
transitory and permanent demand shocks. When demand is subject to persistent growth
shocks and supply is restricted, the role of storage is shown to be speculative, instead of its
classic mitigating role. This is consistent with price persistence and volatility co-moving, as
observed.Most folks are good; a few aren't.Comment
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