ABSTRACT
This chapter seeks to contribute to the analysis of the short-run functioning of the world oil market. Verleger has constructed an econometric model of the dynamics of this process. He assumes that refiners base their expectations about future prices on a geometrically distributed lag of past spot prices. Bohi offers an alternative understanding by focusing on the apparent increase in demand by the final users of petroleum products. He conjectures that this Increase was a result of hoarding because of the uncertain supply situation. Badger and Belgrave argue that neither refiners nor the OECD governments understood at the time that the building of inventories was counterproductive for market stability.
