The future of OPEC and crude oil prices
by Michael D. Williams
International Journal of Global Energy Issues (IJGEI), Vol. 10, No. 1, 1998

Abstract: To forecast the future, this paper examines historical trends and presents a new idea. A hypothesis is presented that there is an inverse relationship between crude oil prices volatility and the strength of the relationship between the owners of crude oil (host governments) and the oil companies that develop, refine, market and sell the products. The stronger the relationship, the greater the security, the lower the price volatility and associated price level. This pattern has been very strong in the past: Looking to the future, many oil riche OPEC governments are developing and enhancing relationships with oil companies. If the historical pattern holds in the future, the stronger relationships will imply greater security, lower price volatility and lower prices. OPEC will continue as an institution, but the strong relationships its member governments are building with the oil companies will help assure a lower level of future crude oil prices.

Online publication date: Wed, 09-Jul-2014

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