If you are wondering how crude oil managed to rise from $35 to $80 during a recession, maybe you will find the answer in an article from the Manchester Guardian. According to the paper, ”the world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.”
Conspiracy theories like this are generally impossible to prove since none of the sources will ever agree to reveal their names. Maybe it is true; maybe it isn’t. On the other hand, price is a pretty good guide to supply and demand. We use price as the input to our models because it is readily available and transparent to everyone. Price could be especially helpful if data is intentionally being withheld from the public, since the actual information tends to leak out over time and have an influence on price anyway.
If this story is accurate, what happens to the oil price as world economies recover and demand begins to expand more strongly?
